Citibank cashes in $720m with flagship shop sale

US-based Citibank sold its giant shop at Pedder Street in Central for HK$710 million to a Taiwanese manufacturer, bringing the lender a paper gain of around HK$320 million after holding the property for 17 years.

The shop measures a usable floor area of 8,539 square feet, suggesting an average price of HK$83,148 per sq ft.

Citibank will rent it from the new owner to continue branch services, the bank’s representative said in response to questions.

The property was acquired by a company called Shiny Profit, whose director is Miguel Chang Yan Shee, data of Companies Registry showed. Chang is a veteran commercial property investor.

Citibank first acquired the premises for HK$88.88 million in 1988 before selling the shop at HK$162 million in 2002.

The firm then reacquired the property at HK$390 million in 2004.

The news came as the shop vacancy rate in Causeway Bay has dropped to around 10 percent, data from a local property broker showed, as retailer and food and beverage shop keepers are rushing to rent shops ahead of the traditional peak Christmas and New Year season.

Among five core consumption areas, Causeway Bay was the top performer by posting a drop of 1.53 percentage points year on year to 10.06 percent in August, said Wong Wai-kee, director of Centaline Commercial.

The month-on-month figure little changed for the district, Wong said.

Retailers as well as the food and beverage business in Causeway Bay are well supported by locals since the district is a major consumption area in the city, Wong said, adding that the rental transaction was fueled by a significant drop in rentals for some shops.

Other than that, the shop vacancy rate in Central and Wan Chai both rose year on year but inched down slightly quarter on quarter.

The figure for Central decreased by 0.07 percentage points to 20.47 percent in August, compared to July while that for Wan Chai went down by 0.15 percentage points to 14.77 percent. The year-on-year readings are 0.09 percentage points and 0.06 percentage points higher for the two districts, respectively.

Meanwhile, Tsim Sha Shui reported a 0.04 percentage point rise in its vacancy rate to 15.51 percent while Mong Kok fell 0.06 percentage points to 11.81 percent, according to Wong.

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