The family of Hong Kong’s late “Shop King” Tang Shing-Bor continues to market their holdings in the city, having completed at least three asset sales over the past two weeks, according to sources familiar with the transactions.
The family has sold some 17 properties so far this year, with the three most recent deals having taken place in the last two weeks, including a pair of retail transactions at Beacon Heights Shopping Centre and at Wai Ching Court in Kowloon which totaled HK$129 million.
Also within the last month, the family reportedly sold two units at the Centro-Sound Industrial Building in Hong Kong Island’s Shau Kei Wan for HK$55 million and took a loss of HK$33 million, according to local media accounts last week.
Under pressure to liquidate their assets over the past two years, the Tang family had since January put up for sale properties worth more than a combined HK$10 billion ($1.27 billion), according to Mingtiandi’s tally, even as total investment volumes in Hong Kong nearly halved over the first quarter.
Offloading in Kowloon
In the Beacon Heights Shopping Centre disposal, the Tang family, which has been led by Stan Tang, the youngest son of the late patriarch since Tang Shing-bor’s demise in May of last year , sold five units spanning 23,636 square feet (2,195 square metres) and 36 parking spaces at the retail complex at 1-19 Lung Ping Road In Kowloon’s Beacon Hill neighbourhood to a company named Yield Top Capital Resources Limited, with the directors of that company still unidentified.
About two years before the disposal, the Tangs were said to have taken out four mortgages on that retail property, in an apparent rush to raise cash during the period between March 2020 and January 2021, when Hong Kong was hit by the COVID-19 pandemic before it could recover from the social unrest in the preceding year.
The first and second mortgage loans were worth HK$106 million, according to local media reports, which noted that the amount for the other two were not disclosed.
With current monthly rental income at the property at around HK$248,000, the new owner of the shops at Beacon Heights Shopping Centre is able to enjoy a rental yield of 3.3 percent from the asset, which well exceeds current average yields for private retail properties in the city of 2.5 percent, according to Alex Leung, senior director at surveying firm CHFT Advisory and Appraisal.
The buyer of the Tangs’ ground floor shop in Jordan, which spans 2,800 square feet at 14-42 Wai Ching Street, should be receiving a rental yield of 2.9 percent, said Leung, who added that the current rental income for the property is at HK$95,000 per month.
Losing Out in Shau Kei Wan
Beyond its retail disposals and despite a sharp decline in Hong Kong’s total investment volume over the first three months of 2022, the Tang clan was able to take advantage of what Leung described as strong investor interest in Hong Kong industrial assets with the Shau Kei Wan units currently bringing in monthly rent of HK$150,000 in total.
Units A and B on the ground floor of the building, which cover about 5,320 square feet of saleable area, were reportedly sold on 12 May to a holding company under a director named Lee Mun Wah.
The late Shop King had purchased both units in the Centro-Sound Industrial Building in 2017, said Leung. At the time of that purchase, the Tang family patriarch also owned some upper-floor space in the building, as well as a nearby industrial building, and could have planned to convert the properties into retail space, he said.
However, the city’s ongoing retail drought wiped out much of that conversion potential, Leung said. In the first three months of this year, retail capital values dropped 0.6 percent quarter-on-quarter, while on the leasing side, rents for both prime street shops and major shopping centres registered a decline of 5 percent over the period.
The Tang disposals in the latter half of May followed sales earlier that month, including a HK$1.42 billion deal to sell Bay Bridge Lifestyle Retreat hotel in the New Territories to a property firm controlled by William Cheng, a son in law of Henderson founder Lee Shau Kee.
About three months before that deal, the Tang family had sold a Kowloon industrial building to local mobile data services provider Telecom Digital Holdings for HK$733 million.
In January, the family raked in a reported HK$650 million from its sale of the Indi Home Shopping Arcade, also in the New Territories, to an entity related to the Ma family which owns the Oriental Daily newspaper.