Lofter and its partners are acquiring the aging properties as Hong Kong’s pandemic restrictions have choked off the flow of visitors which had made Tsim Sha Tsui a shopping mecca. Hong Kong retail sales fell for a second consecutive month in March, according to government figures, and research by Savills shows that rents for shops and mall spaces fell by an average of 5 percent in the city during the first quarter.
Retail Value Emphasised
Before redeveloping the 9,650 square foot commercial site, which is currently occupied by a golf shop and other retail establishments, the three partners will have to gain full control of the buildings, with the announced purchase providing them with majority ownership of the properties.
carol Lofter Group
Lofter founder Carol Chow
“The attractive acquisition price can only be achieved by collective sale, which Lofter is very experienced in,” the group’s director of investment management Alvin Leung told Mingtiandi via email. “Our acquisition price is also way below the price of the nearby Ashley Road transaction in 2019,” he added.
Leung indicated that the group has acquired 97 percent ownership in the existing buildings, with a single unit remaining unpurchased. He added that the joint venture has applied for a compulsory sale of the remaining space in the building, which under Hong Kong law, would allow for owners of 80 percent or more in an aging property to force a tender at a market valuation.
This article first appeared in the Morning Brief. Get the Morning Brief sent directly to your inbox every Monday to Friday by 6:30 a.m. ET. Subscribe
Thursday, May 19, 2022
Today's newsletter is by Brian Cheung, an anchor and reporter covering the Fed, economics, and banking for Yahoo Finance. You can follow him on Twitter @bcheungz.
Yesterday, Target's (TGT) earnings were a huge whiff.
The stock market did not care for this news, and equities across the board tanked with the S&P 500 turning in its worst day since June 2020.
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Full screen The overall concern: retailers are suggesting there's been a dramatic turn in the economic picture. But another issue reared its head in these reports — retailers have built a stockpile of products they may have to discount to move. “We ended up carrying too much inventory in several categories,” Target CEO Brian Cornell told investors on Wednesday.
And when companies find themselves with too many kitchen appliances, TVs, and pieces of outdoor furniture, back rooms and warehouses that could be otherwise carrying food or personal care items end up getting crowded out. The choice: hold onto those bulky items, or sell them at a discount to make space. “We chose the latter, leading to incremental markdowns that reduced our gross margin,” Cornell said, adding that those were “difficult decisions.” The retail industry's bigger problem? This is not a Target-specific story. Walmart (WMT), which reported its own clunker of a quarter on Tuesday, said it needs another couple of quarters to “work through and sell through” excess inventory.