Hong Kong’s Goldin Financial Global Centre Sold After Two Year Battle

Hong Kong’s Goldin Financial Global Centre has sold after a two year struggle over the Kowloon East office tower.

A social media post by Savills, which has been managing a tender of the 28-storey building on behalf of creditors stiffed by defaulting mainland conglomerate Goldin Financial declared the sale on Wednesday evening without providing details on pricing or the identity of the buyer.

Local press reports have cited deal amounts of between HK$6.8 billion ($866 million) to HK$7.0 billion for the 852,501 square foot (79,200 square metre) tower, pricing the deal at HK$7,977 per square foot or more. Mingtiandi was not able to independently verify financial details of the transaction.

At the reported HK$6.8 billion price, which some analysts believe to be optimistic, the 2016-vintage, grade A asset would be selling for around 44 percent below the HK$12 billion minimum set in an initial tender commenced in September 2020 after the property was seized by receivers in July of that year.

In December of 2019 Goldin Financial had valued the Leed Platinum building then used as its headquarters at HK$18.3 billion.

Game Over

At the reported price, the sale should provide relief to holders of HK$6.8 billion in senior notes issued by Goldin in April of 2019 and with Deutsche Bank affiliate DB Trustees (Hong Kong) Ltd acting as trustee.

After a series of record-setting land buys in Hong Kong, Goldin defaulted on the notes, which were backed by a trust deed on the Goldin Financial Global Centre, and receivers were appointed to redeem the asset.

In late 2020, in a move seen by some observers as an attempt to block the receivers’ tender of the building, Goldin announced that a businessman under the name “Fong Tim” had agreed to buy the building at 17 Kai Cheung Road in Kowloon Bay, stalling moves by creditors. When that sale failed to proceed, and after a protracted legal battle was declared void, the purported buyer was forced to forfeit a HK$2.03 billion deposit.

A fresh tender for the building was launched in May, with media reports earlier this month naming local development giant Nan Fung as the buyer. Representatives of Savills earlier denied naming Nan Fung as the buyer and today declined to provide further details on the sale. Inquiries to Nan Fung went unanswered at the time of publication.

Down Market

At the reported price, the sale of the Goldin Financial Global Centre would mark the largest single asset transaction in Hong Kong’s real estate market so far this year, as rising interest rates and an economic slowdown in China have undermined the world’s most expensive commercial real estate market.

Reported to be 30 percent vacant in May of this year, Goldin’s erstwhile trophy has struggled as a high-specification building in a secondary location within the emerging Kowloon East commercial hub at a time when occupiers have been cutting back their footprints and investors have been keeping their checkbooks locked away.

From March 2019 through March 2022 Hong Kong’s grade A office market contracted by 3.1 percent according to a report released this month by CBRE, with the total area of desk space occupied in the city shrinking by 2.3 million square feet, or the equivalent of three major office towers.

“Since mid-2019, company downsizing has been a prominent trend and led to substantial contraction in total occupied space and record-high vacancy in Hong Kong’s Grade A office market, triggering the longest and deepest downturn as a result,” CBRE said in a statement.