CLSA Capital Partners sells Hong Kong retail center

CLSA Capital Partners has sold Zing!, a 27-story retail center commercial building in Hong Kong’s Causeway Bay retail district, according to local media outlets. The buyer was not disclosed.

The building sold for HK$2.1 billion ($268.6 million), realizing a gain of about HK$500 million ($64 million) since CLSA acquired the building three years ago. The sales proceeds will be in the form of a cash lump sum of HKD$1.1 billion ($140 million) and an ownership transfer of L. Plaza in Sheung Wan (valued at HK$1 billion/$130 million) from the buyer.

Zing! totals 79,051 square feet. It is 100 percent leased. Retail tenants include F&B, beauty salons, gyms, clubs and karaoke venues.

The building is located at 38 Yiu Wa St., adjacent to Times Square Hong Kong in the second-priciest shopping district in the world.

A handful of ginza-style commercial buildings in Causeway Bay reportedly changed hands in July, including the sale of the 32,700-square-foot L’Hart for HK$965 million ($123 million) and the 68,000-square-foot Cubus for HK$2 billion ($260 million).

Retail rent across all the city’s four major retail hubs declined during the second quarter 2017 and retail sales over the first four months of 2017 fell slightly by 1.0 percent year-over-year, according to Cushman & Wakefield.

The largest retail rent decrease was in Central, which saw average rent fall 3.4 percent quarter-over-quarter. The market continued to shift away from an emphasis on luxury toward more affordable and mass-market retailers in such retail trades as fashion and cosmetics.

With the exception of Central, vacancy levels in other areas remained largely unchanged during the second quarter 2017. In Central, the average vacancy rate edged up from 5.1 percent to 7.1 percent at quarter’s end. The average vacancy rate remained the highest in Mongkok at 15.1 percent.

Cushman & Wakefield concluded the uncertainty in the market is causing retailers to approach the market cautiously. And as the retail market increasingly targets domestic consumers, leisure and F&B continue to witness strong growth.