New World Development's old building in Causeway Bay approved for compulsory sale, with a reserve price of over HKD 2.8 billion, 37% lower than the valuation at the time of application
New World Development (00017.HK) applied for a forced sale of the old buildings on Persian Street in Causeway Bay in 2022, and has now received a forced sale order from the Lands Tribunal, with a reserve price of HKD 2.838 billion, which is 37% lower than the valuation of HKD 4.505 billion at the time of the application, but still represents the most expensive forced sale site in the past two years.
The approved forced sale site is located at 54 to 60 Persian Street and 5 to 11 Lee Garden Hill; 62 to 68A Persian Street and 13 to 19 Lee Garden Hill, Happy Mansion; as well as 70 to 76 Persian Street, 60 Russell Street, and 21 to 27 Lee Garden Hill, totaling 3 sites with an area of approximately 19,831 square feet, which can be rebuilt with a plot ratio of 15 times, expected to build a commercial project with a total floor area of 297,500 square feet, and enjoys three sides of large single-sided views. The current reserve price of HKD 2.838 billion translates to a land price of approximately HKD 9,540 per square foot based on the buildable floor area.
The project is located between the landmark commercial projects Times Square and Hysan Place, containing several old buildings completed in 1963, with heights of 6 to 9 stories. The ground floor is for non-residential uses such as shops, while the upper units are residential, all without elevators. Documents from the Lands Tribunal show that New World Development applied for the forced sale of the above 3 sites through its 19 subsidiaries in May 2022, at that time already holding 80.09% to 90.32% ownership. In recent years, New World Development has actively proposed acquisitions to small owners, currently holding 83.33% to 92.47% ownership.
According to information, New World Development began acquiring old buildings in the Persian Street, Lee Garden Hill, and Russell Street area as early as 2013. By 2021, the Chen family of Ying Kee Tea House (08241.HK), along with senior shop investors Zhang Shilai and Zhang Lingzhou, jointly sold over 20% ownership of the old buildings at 60 Russell Street, 70 to 76 Persian Street, and 21 to 27 Lee Garden Hill. New World Development purchased them for HKD 1.28 billion, reaching the threshold for forced sale, and initiated the forced sale application the following year, hoping to unify ownership. The current owners facing forced sale include Emperor International (00163.HK), senior investor "Minibus King" Ma Yamu family, and China Merchants Yonglong Bank, mainly holding ground floor properties
