Causeway Bay $250B Strategic Expansion

Posted on 21 May, 2021 | By Property852

In a joint bid, the commercial site on Caroline Hill Road has now been awarded to Hysan, the biggest landlord in Causeway Bay, as well as Chinachem. The site was sold for HK$19.78 Billion.

CEO of Hysan, Ricky Lui Kon-wai said that this was just the start and that they planned to invest well over HK$250 Billion more into the project. The site would serve as an extension of Hysan's territory in Causeway Bay, ultimately seeking to attract Hongkongers in the middle-class. He later went on to say that this would be done so by outfitting the site with a high quality environment for working and living.

The Hysan CEO further described the site as being "home adjacent", stating that they had shown interest in the location even as early as 10 years prior after the government had made the proposal to relocate the Electrical and Mechanical Services Department and open the site for commercial use.

In the briefing, Lui said that, while the commercial site would largely sit as an independent construction under any other developer, with Hysan at the reigns, it would be the place for a "strategic extension".

This isn't all the Hysan company has been up to. Their Lee Gardens territory is set to receive an expansion of its own at around 27%, from nearly 4 million square feet to roughly 5 million.

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After the construction of the covered footbridge network, connecting it to the other commercial buildings, the Hysan Place will take only around a seven-minute walk between it and their new project.

Liu also described the new site as a "back garden" to their Lee Gardens, allowing people a full-in wide view of the Happy Valley as well as the Mid-Levels while also enjoying over 60,000 square feet of green space.

When asked, the CEO stated that plans were already underway to include restaurants, pet and lifestyle-oriented businesses, a children's playground, as well as several other retail stores. They are set to be built across 100,000 square feet of area.

In total, the site has a total area of 1.07 million square feet with around 930,000 being used for office buildings and parking lots. Of the remaining 140,000 square feet, 40,000 square feet is reserved government land with the rest being put towards the aforementioned retail space. The office buildings will not exceed over 30 floors and would include a 4-level basement and parking lot.

The last commercial building that was owned by the company was Lee Garden Three, which had been completed back in 2018. Since then, their current project, the Hysan Place (originally started in 2012) is expected to be completed between 2026 to 2027, a 15-year project.

Because of that, the company looks at their newest project as something of a flagship for them due to its ability to bring in new occupants while also retaining their current tenants while the older buildings go through renovations.

Lui emphasized that, rather than an ambitious decision, their investment in the plot was a largely rationally-based one. He stated that, considering the performance seen by Lee Garden Three (which currently sits at a near-zero vacancy) the new site would deliver even higher returns thanks to its nicer view and newer amenities.

Construction of the site is slated to sit at around HK$25 Billion to HK$26 Billion with a square foot cost of HK$5,000.

In regards to their partner, Chinachem, Lui said that the partnership was good as it allowed the group a level of retained cash flow in the interest of other potential investments.

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