Chen Hongtian saga: Hong Kong university pays US$334 million for tower in distress sale

One HarbourGate East Tower, a premium office building formerly owned by cash-strapped Chinese tycoon Chen Hongtian, has found a new owner after Hong Kong Metropolitan University (HKMU) struck a deal with the receivers, according to people familiar with the matter.

The university agreed to pay HK$2.6 billion (US$334 million) for the 15-storey building in Hung Hom, Kowloon, the people said. It reflects a 42 per cent discount to the HK$4.5 billion Chen’s flagship entity Cheung Kei Group paid for the property in 2016.

The deal, the single-largest transaction in the city this year, suggests more investors are taking the plunge to scoop up distressed assets at deep discounts as the government takes steps to arrest a slump in the property market. Top mainland officials have also recently vowed to support Hong Kong as a financial hub, a tacit backing for a key pillar of the economy.

“HKMU has been actively exploring different ways to provide its students and staff with more and enhanced spaces for learning, teaching and research, including executive training programmes” to support its expansion, it said in a statement to the Post. It declined to elaborate on the transaction.

One HarbourGate East comprises an office tower and two levels of retail space totalling 279,000 sq ft, as well as 155 car-parking spaces. The asset was valued at HK$7 billion in 2022. It was put on the chopping block in July, after a failed attempt to sell in May 2023.