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Hong Kong property
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Kailong pays US$124.5 million for Hong Kong industrial building, the largest deal in the segment since August 2019, after scrapping of double stamp duty

  • The property fund manager bought the Hang Fat Industrial Building for HK$4,231 per square foot, 15 to 20 per cent below its original price a year ago
  • The government’s recent abolition of double stamp duty on non-residential property was a major factor in the deal, says Kailong’s chief executive

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Hang Fat Industrial Building, Castle Peak Road, Cheung Sha Wan. Photo: Google Map
Peggy SitoandSandy Li

Hong Kong-based real estate fund manager Kailong has bought an industrial property in Cheung Sha Wan for nearly HK$1 billion (US$124.5 million), the largest transaction in the segment since August, 2019.

The purchase was motivated by the recent cancellation of the double stamp duty on commercial properties and the long-term outlook for the market, said Kailong Hong Kong chief executive Ivan Ho.

“Protests, coronavirus pandemic and trade war: all these risk factors have been priced in. We expect a more stable future in the years ahead,” said Ho, adding that it is the right time to look for a bargain.

Kailong bought the Hang Fat Industrial Building for HK$965 million, or HK$4,231 per square foot. The building could generate a total gross floor area of 228,053 sq ft after redevelopment.

Kailong has invested more than US$3.5 billion in 52 property projects. Of these, it has already exited 32, pocketing excellent risk-adjusted returns.

Ho said the government’s scrapping of the double stamp duties – officially known as Double Ad Valorem Stamp Duty (DSD) – on commercial properties brought down the transaction cost, and was a major factor in the company’s decision to make the purchase.

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