Singapore-headquartered real estate investment manager SilkRoad Property Partners have agreed to pay HK$321m ($41.4m) for the Smile Centre in Fanling, Hong Kong. The building was previously owned by a company controlled by the children of Joseph Law, founder of Smile Industries, a Hong Kong toy manufacturer.
The 6-storey building currently serves as a logistics centre with cold storage capabilities. With a total gross floor area of approximately 97,750 sq. ft. the sale price for the facility translates to HK$3,284 per sq. ft. The centre is currently leased to Horstrong Logistics, an established logistics and cold storage operator founder in 1985. The block was sold on an as-is basis with its existing tenancy in place.
Fanling is a town in the northern New Territories of the Hong Kong Special Administrative Region. The area is a popular location for industrial investment opportunities, with close access to several Mainland border crossing points and the Yantian International Container Terminals in Shenzhen.
Global property consultants CBRE were appointed by the vendor as the sole agent for the sale. According to CBRE, supply of industrial sites remains limited in Hong Kong. At the same time anticipation for the recovery of global trade, the revival of the Chinese economy and the growth of e-commerce are driving demand.
Samuel Lai, Senior Director, Advisory & Transaction Services – Industrial & Logistics, CBRE Hong Kong commented, “We have seen robust investment activities in Fanling, including a recent record-breaking government land tender of an industrial site sold to Mapletree Investments and acquisitions of multiple land plots by a listed data centre developer. Industrial assets continue to attract interest in the market against the pandemic backdrop, owing to the user profiles that will be attracted into the sector. We expect to see more funds chasing quality industrial assets from this year onwards.”
In January of this year SilkRoad Property Partners successfully raised $549m for its SilkRoad Asia Value Partners II (SAVP II) fund, well exceeding its initial target of $500m. SAVP II is the company’s third value-add fund and since its establishment in 2012, SilkRoad has now raised $1.58bn of equity for their value-add strategies.
Commenting on the latest deal, Peter Wittendorp, CEO, SilkRoad Property Partners said: “We are delighted to work with CBRE again on the successful purchase of this high-quality industrial asset. The project is the fourth industrial addition to our Hong Kong portfolio, reflecting our strong confidence in the city’s resilient industrial sector.”