On 29th December, 2017, LVGEM (China) Real Estate Investment Company Limited (“LVGEM (China)”) and Wheelock Properties Limited (WP) has completed transition of the sale of shares for 8 Bay East, which marks the completion of the acquisition of this full seaview grade-A commercial building for HK$9 billion by LVGEM(China). It is a further step for LVGEM (China) to tape into the Hong Kong market and strengthen its business layout in the Guangdong-Hong Kong-Macao Greater Bay Area (「粵港澳大灣區」,Greater Bay Area) after the Lau Fau Shan project in Hong Kong.
Strengthen the layout of Hong Kong’s CBD
Recently, the grade-A office buildings at prime locations in Hong Kong have been highly sought by Chinese firms, and the rental of grade-A office buildings at Central, a central business district (CBD) in Hong Kong, has soared in recent years. The Hong Kong Government is planning to create a new business district and actively builds Kowloon East as the second CBD, which includes the former Kai Tak Airport, the business district of Kwun Tong and Kowloon Bay. The 8 Bay East, the full seaview grade-A building LVGEM (China) has acquired, is located at Hoi Bun road in Kowloon East.
8 Bay East is located at 123 Hoi Bun Road, Kowloon East and it is hold by the Wharf Group and is being sold by Wheelock Properties as its sole agent. It is a 19-storey building, totals approximately 600,000 square feet. The project is expected to be complete by the mid of 2019.
Strengthen its leading position within the real estate sector and commercial development industry
LVGEM (China), established in 1995, is a well-known comprehensive real estate developer and commercial property operator in Shenzhen. It has three principal business segments including property development and sales, commercial property investment and operations as well as comprehensive services. With the strategy of “Focusing on Major Cities and Their Core Areas” (「深耕核心城市，聚焦城市核心」), and the main business line of “Shenzhen and Hong Kong”, the Group focuses on the geographic expansion in the Greater Bay Area and their projects are all located in the core areas of Shenzhen, Hong Kong and Zhuhai, etc..
With regard to the reason for the focus on Hong Kong market, Huang Jing Shu, Chairman of LVGEM CHINA, said, “LVGEM (China) has developed and operated a large number of high-quality residential and commercial development projects in the Greater Bay Area and achieved remarkable social, economic and environmental benefits. ” The Group focuses on the creation of its own business characteristics and adheres to the dual-core layout, two-way expansion and two-wheel-driven development strategy in operation, building its unique and competitive ability in the market.”
The transactions represents a strategic step for LVGEM (China) to create a meaningful presence in the Hong Kong property market and will strengthen its leading position within the real estate sector and commercial development industry as well as its market position and brand influence in the Greater Bay Area. As the Greater Bay Area will become part of the national strategy plan in China, LVGEM (China) will embrace this opportunity to create more value and contribution to the investors and the society with its development and operation of several core projects located in Greater Bay Area.
Offer steady rental income and long-term capital gains
Wheelock Properties possess proven experiences in developing and selling premier grade-A offices in strategic commercial districts, offering state-of-the-art and sustainable business environment for corporations. Stewart C. K. Leung, Chairman of WPL, said, “8 Bay East is ideally located in the heart of Hong Kong’s new CBD overlooking the 270ºC panoramic views of Victoria Harbour. As the development of Kowloon East is becoming more matured, we envisage that many PRC corporations, multi-national and Fortune 500 companies will be attracted to this area. The deal also creates a win-win scenario for both the vendor and the purchaser.
According to an industry insider, the acquisition reflects LVGEM (China)’s strategy of strengthening the layout of Greater Bay Area. According to the successful case of its NEO building at Futian CBD in Shenzhen, LVGEM (China) acquires the commercial property project in Hong Kong, further representing LVGEM (China) follows the strategy of strengthening the Greater Bay Area layout and holds favorable view on the long-term development of Hong Kong market. In addition, Kowloon East, as the second CBD in Hong Kong in the future, has perfect transportation planning. With the light rail and the Shatin to Central Link coming into service in 2021, Kowloon East will make its transportation network more accessible and convenient, enabling to withstand higher volumes of traffic. Given that it has favorable location and will offer steady rental income and long-term capital gains to LVGEM (China), the project has great investment value.
LVGEM (China) Real Estate Investment Company Limited
LVGEM (China), with the strategy of “Focusing on Major Cities and Their Core Areas”, and the main business line of “Shenzhen and Hong Kong”, focuses on the geographic expansion in Greater Bay Area, develops and operates the projects located in Shenzhen, Zhuhai, Huazhou, Suzhou and Dongguan etc.. The Company is ranked top 10 in terms of All-rounder Real Estate Developer in Shenzhen for consecutive years. In 2015, LVGEM (China) successfully listed in Hong Kong (Stock Code: 00095HK). Its LVGEM Asset Management Company successfully operated numerous commercial properties as represented by two commercial brands, namely “Zoll” (「佐阾」)and “NEO”. Its LVGEM Property Management Company owns the first grade qualification of the national realty management enterprise and provides high quality and comprehensive property management services to all kinds of the properties. Its superior business hotel, LVGEM Hotel is located in Shenzhen’s CBD and well-equipped to provide customers with a full range of top-level services.
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http://www.lvgem-china.com/zh-hans/about/corporate-profile/
About Wheelock Properties (Hong Kong) Limited
Wheelock Properties is a wholly-owned subsidiary of Wheelock and Company Limited (SEHK:0020). Its principal activities include the undertaking of property development, sales and marketing, and asset management functions of certain Wheelock and Wharf Group properties.
Founded in 1857, Wheelock and Company Limited is a listed investment holding company headquartered in Hong Kong. Wharf Holdings, the Group’s principal investment, is strategically focused on property and infrastructure in Hong Kong and China.
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