CHINA Mobile Hong Kong is in talks to buy commercial property in Hong Kong once owned by struggling tycoon Chen Hongtian, according to people familiar with matter.
The state-owned telecommunications operator’s Hong Kong unit made an offer in recent weeks for Cheung Kei Center, which has been on the market since 2023, the people said, asking not to be identified because the matter is private.
While details are still under negotiation and could change, the parties aim to complete the deal by the end of the year, and the offer price is in a range that goes as high as about HK$3 billion (S$517 million) subject to certain conditions, one of the people said.
The property, comprising an office building and a two-storey retail villa as well as 155 parking spaces, was valued at about HK$7 billion in 2022, according to a sales document.
Chinese companies are becoming active buyers of property in Hong Kong, taking advantage of a downturn in the financial hub in recent years. High interest rates and a weakening economy in China have spurred firesales in offices and mansions.
At least HK$2.1 trillion has been erased from commercial and residential real estate values in the city since 2019, according to an analysis by Bloomberg Intelligence in June.
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Chen founded Cheung Kei Group by combining businesses he owned in Hong Kong and Shenzhen in 1990 when the country was pushing for market-economy reforms.
The company pivoted to real estate development and financial investments after achieving success in textiles. During its heyday, Cheung Kei Group owned 10 office towers and hotels, including Cheung Kei Center, across the world, according to the group’s website.
The premises in Hong Kong were pledged to a group of banks to secure a loan of as much as HK$4.6 billion in 2019, according to land records. Those banks include two Chinese lenders and a local group led by Hang Seng Bank, according to the people.
Cheung Kei Group said in a statement in May 2023 that the loan had defaulted in March of that year. Hang Seng Bank seized the property at that time, and appointed PricewaterhouseCoopers as the receiver. The tower was then put on the market in May that year.
A person who picked up several calls to China Mobile said that the person in charge of investor relations was unavailable, and there was no reply to messages. E-mails to the investor relations of China Mobile and the media relations of its Hong Kong entity went without replies. In a visit to China Mobile’s office in Hong Kong, a receptionist said the relevant person in charge of such enquiries was not available and there was no further reply.
Cheung Kei Group did not immediately respond to a request for comment, while PwC and Hang Seng Bank declined to comment.
Sportswear maker Li Ning bought a commercial building in the city for HK$2.2 billion from local developer Henderson Land Development in December 2023; China Resources Longdation purchased a waterfront shopping mall for HK$540 million in July and another retail podium for HK$310 million earlier this year.
Due to liquidity issues, Chen has lost some properties in both Hong Kong and London to creditors, according to data compiled by Bloomberg. According to a writ in April, he and his family also faced more than US$200 million loan repayments to banks. BLOOMBERG
