{"id":333062,"date":"2022-10-02T20:56:38","date_gmt":"2022-10-02T12:56:38","guid":{"rendered":"https:\/\/www.mingtiandi.com\/?p=333062"},"modified":"2022-10-03T21:14:51","modified_gmt":"2022-10-03T13:14:51","slug":"ares-buys-51-stake-in-new-world-hong-kong-project","status":"publish","type":"post","link":"https:\/\/www.mingtiandi.com\/real-estate\/projects\/ares-buys-51-stake-in-new-world-hong-kong-project\/","title":{"rendered":"Ares Buys $392M Stake in New World Project as First Hong Kong Real Estate Deal"},"content":{"rendered":"
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83 Wing Hong Street is expected to be completed in the fourth quarter of next year<\/p><\/div>\n

US private equity firm Ares Management has made its first direct investment in Hong Kong real estate, picking up a 51 percent stake in a Kowloon office project from New World Development for approximately HK$3.07 billion ($392 million).<\/p>\n

New World revealed the deal to the Hong Kong stock exchange<\/a> late on Thursday, saying that it had formed a joint venture with a unit of Ares SSG, the local branch of the US firm, to complete a 363,392 square foot (33,760 square metre)<\/a> project at 83 Wing Hong Street in Cheung Sha Wan, a former industrial area which is rapidly redeveloping as a commercial hub.<\/p>\n

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\u201cReal estate has been one of the key sectors during our long and successful investment history across twelve Asia-Pacific markets,\u201d said Edwin Wong, managing partner and CEO of Ares SSG in a statement. \u201cWe look forward to working with NWD and leveraging our extensive experience in real estate investing in the region.\u201d<\/p>\n

The investment by Ares SSG was announced just less than two months after Bryan Southergill, a former KKR executive, came aboard to lead the establishment of the firm\u2019s real estate business in Asia<\/a> and around two and a half years after Ares Management set up Ares SSG by acquiring a controlling interest in Hong Kong-based distressed asset specialist SSG Capital Management<\/a>.<\/p>\n

Strata Success in Cheung Sha Wan<\/h3>\n

\u201c(Cheung Sha Wan district) has witnessed remarkable changes in recent years,\u201d New World said in its filing. \u201cBoasting excellent transportation infrastructure and ancillary facilities, its convenient location and access include an approximately half-hour drive to Hong Kong International Airport and the Shenzhen Bay Highway Bridge, promising great potential for transforming the area into a new core business district in West Kowloon.\u201d<\/p>\n

\"Edwin

Edwin Wong of Ares SSG<\/p><\/div>\n

New World, which in recent years has taken on three major commercial development projects in Cheung Sha Wan, including the Wing Hong Street tower, will be responsible for construction, property and asset management for the development, as well as sales and marketing of units in the strata title property, the developer said in a press release<\/a>.<\/p>\n

\u201cAfter completion of construction and development of the property into a commercial\u00a0complex, the unit sales of such commercial complex will further strengthen the income\u00a0stream of the group,\u201d New World said, noting that it expects to book an unaudited gain of HK$450 million<\/a> on the stake sale.<\/p>\n

While Hong Kong\u2019s office market has been locked in a three year slide which has seen capital values and leasing rates fall, New World has scored some victories with its Cheung Sha Wan strategy, including selling off around 80 percent of the space in its 888 Lai Chi Kok Road project, according to sources familiar with the project.<\/p>\n

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Located around 10 minutes\u2019 walk southwest of the Wing Hong Street project, New World renamed 888 Lai Chi Kok Road as the NCB Innovation Centre in June this year, and had brought sales in the project to 70 percent by October of 2021. In September of last year the developer sold a set of three high-level floors in the building<\/a> along with naming rights to the mainland’s Nanyang Commercial Bank (NCB) for HK$1.2 billion ($154.1 million), in a deal which valued the space at the equivalent of HK$17,500 per square foot.<\/p>\n

Emerging Hub<\/h3>\n

The Wing Hong Street project occupies New Kowloon Inland Lot No. 6572, a site at the intersection of Wing Hong Street, Yu Chau West Street and Wing Ming Street which New World acquired for HK$2.97 billion in August 2017<\/a>.
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