U.S. Government Sells a Hong Kong Compound For $332 Million

The U.S. government agreed to sell a compound for consulate staff in one of Hong Kong’s most exclusive residential areas to a local developer for nearly a third of a billion dollars.

Property agent CBRE Group Inc. said on Thursday the buyer would pay $332 million (reported as 2.57 billion Hong Kong dollars), for the site at Shouson Hill, on the southern side of Hong Kong island.

The site covers 94,796 square feet, with 26 apartments in six low-rise residential buildings and an outdoor swimming pool. The buyer,

Hang Lung Properties Ltd.,

plans to redevelop the site into luxury detached houses.

Hang Lung said including the land cost, it planned to invest about HK$4 billion, in total, and aimed to complete the redevelopment by 2024.

China’s imposition of a national-security law on Hong Kong has helped stoke tensions between the United States and China.

A spokesperson for the U.S. consulate in Hong Kong said the disposal was “purely a business decision” made as part of a global reinvestment program by the State Department.

“It will not affect our presence, staffing, or operations in any way,” the spokesperson said. The deal is expected to close by the end of the year, and some of the proceeds will be reinvested into U.S. government-owned properties in Hong Kong.

The buyer said the purchase price was reasonable, and the purchase was “a vote of confidence in Hong Kong’s future.” Based on the nearly 47,400 square feet of gross floor area available for redevelopment, the price equates to just less than US$7,000 a square foot—more than one-third lower than the rate paid by a mainland Chinese developer for an adjacent property two years ago.

U.S. government dealings in international property have sometimes proved controversial. Two years ago, President Trump attacked a 2008 decision to sell the American embassy in London, and to build a replacement in what he called an “off location.”

Write to Joanne Chiu at joanne.chiu@wsj.com

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[Source : The Wall Street Journal]

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