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Saturday, Mar 06, 2021

Hang Lung put on spot for $1b in Sino-US spat

Hang Lung put on spot for $1b in Sino-US spat

Hang Lung Properties has paid around HK$1 billion in deposits and stamp duty for the American government's six-block residential property at Shouson Hill and has been liaising with the seller through lawyers, but there is no timetable for completing the deal, said chief executive Weber Lo Wai-Pak.
That includes a down payment of HK$257 million and a stamp duty of HK$770 million.

Lo said Hang Lung is still willing to complete the deal but does not know if the United States has fulfilled its diplomatic obligations.

The sale of property owned by the US consulate in Hong Kong failed to be completed as scheduled, as Beijing unexpectedly stepped in and said its approval was needed.

The Land Registry told Hang Lung - which agreed to buy the luxury villas for HK$2.56 billion in September - in a letter that if the US consulate general intends to rent, purchase or sell any property in Hong Kong, it must make a written application to China at least 60 days before.

It also stated that the US consulate is not a commercial entity and that the property is not ordinary real estate either.

Hang Lung said it was not aware of the issues stated in the letter. It is evaluating its options, including exploring the feasibility of extending the period for completing the transaction.

The US contested the necessity to comply with such diplomatic obligations on December 29.

Chinese foreign ministry spokesman Wang Wenbin said the requirement was "in light of US regulations on the management of registered properties of foreign missions in the US and based on the principle of reciprocity."

Washington had put the six blocks occupying a 94,796-sq-ft spread at 37 Shouson Hill Road in Southern district up for sale amid China-US tensions over Hong Kong. It had held the property since 1948.

The twist raised eyebrows as tycoon Ronnie Chan Chi-chung, the outspoken chairman of Hang Lung Properties, is known for his good relations with influential circles in both the mainland and the US.

Beijing's high-profile interference has rarely been seen in other transactions of consulate properties in Hong Kong in the past.

Four years ago, the Canadian consulate sold a house at 6 Goldsmith Road in Jardine's Lookout to Pansy Ho Chiu-king, daughter of late Macau casino tycoon Stanley Ho.

In 2011, the French consulate sold its property at 8 Pollock's Path to Ryoden Development.

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