[photopress:propery_ritz_cartlon.jpg,full,alignright]According to Chinese media reports China Construction Bank, the mainland’s third largest lender, has bought the Ritz-Carlton Hotel in Hong Kong.
The bank intends to redevelop the hotel, located in the Central area of Hong Kong, into a top-end office building. CCB will use the new building as its headquarters in Hong Kong.
The Ritz-Carlton in Hong Kong will be closed later this year (which will be a sadness to many people including this writer) and the building will be razed and redeveloped into a 224,000 square foot grade A office building. Nobody is yet making official statements but it seems to be a done deal.
Although Ritz-Carlton runs the hotel it is owned by Lai Sun Development.
According to Credit Suisse analyst Clifford Lam the price being quoted seems to be at the high end for the Central Business District.
Industry watchers are forecasting a 15-30% increase in residential property prices but have maintained a negative outlook on the office property market in Hong Kong on potential oversupply. The construction of a major new office property — International Commerce Centre (ICC) in West Kowloon, off the Hong Kong island, which is expected to be the third tallest building in the world on completion — has raised worries that all future expansion and new purchases in office properties may move out of the already crowded Central area on the island.
Morgan Stanley set the trend earlier this year when it announced that it was vacating its 170,000 square foot office in Central to take up a 350,000 square foot property in ICC.
Credit Suisse analyst Clifford Lam said, ‘Remember, after ICC, we are not going to see any new office buildings in the core financial district in the next five years. Chances are if the financial market continues to expand we will run out of office space once this new supply is consumed.’