UPDATE 1-U.S. consulate in Hong Kong sells property for $331 mln

(Adds comments of buyer, consulate, details; paragraphs 2,3,5-8)

By Clare Jim and Twinnie Siu

HONG KONG, Sept 10 (Reuters) – The United States consulate in Hong Kong has sold a property used as staff accommodation for HK$2.57 billion ($331 million) via a public tender, a price analysts said was in the low range of estimates.

Hong Kong developer Hang Lung Properties said it bought the property, which it plans to redevelop as luxurious detached homes targeted for completion by 2024.

“The purchase is a vote of confidence in Hong Kong’s future,” Hang Lung said in a statement. Total investment will be about HK$4 billion.

The high-profile sale comes at a time of growing tension between the United States and China, making many mainland and Hong Kong developers hesitant to venture an offer for a property that consultants said was seen as politically sensitive.

An analyst who had estimated a valuation of about HK$3 billion said, “I heard there were not many bidders, because the land is too sensitive and there is a lot of economic uncertainties over selling luxury projects.”

He sought anonymity because of the sensitivity of the deal.

The sale was a business decision as part of a global review of all holdings by the State Department’s Bureau of Overseas Buildings Operations, a representative of the U.S. consulate said.

“It will not affect our presence, staffing, or operations in any way,” he said, adding that multiple offers were received and the deal would close at the end of the year.

The U.S. consulate started the public tender in early June, two weeks after Beijing proposed to impose a new national security law in the Chinese-ruled city. The law officially took effect from June 30.

The public tender ended in late July but the sale was not confirmed until Wednesday. Sale agent CBRE announced the transaction price on Thursday.

The area on a hill in the south of Hong Kong Island overlooking Deep Water Bay, is 94,796 square feet (8,807 sq m), with a maximum gross floor area of 47,397 square feet (4,403 square m) for redevelopment, or a land value of HK$54,138 per square foot.

The staff quarters consist of 26 apartments with 52 parking spaces in 6 low-density residence buildings and an outdoor swimming pool. ($1=7.7499 Hong Kong dollars) (Reporting by Clare Jim and Twinnie Siu; Editing by Clarence Fernandez)

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