Central retail shop bought by Swiss heir in ‘rare’ Hong Kong market move

In a rare market move, a long-established local developer sold a Central retail shop that was held for over 50 years to an heir of Swiss underwear maker Triumph, according to data from the Land Registry, a deal analysts have called “highly unusual”.

The use of international capital to acquire local retail assets in Hong Kong is uncommon. Triumph International did not immediately respond to a request for comment from the South China Morning Post.

The transaction involved a ground-floor shop at Arbuthnot House, 10-12 Arbuthnot Road, Central, with a gross area of about 1,474 square feet. It sold for HK$21.4 million – or HK$14,518 per square foot – late last month, the data showed. The shop is currently leased to the private members’ club Salon No. 10.

The original owner was Associated Builders Corporation Limited. According to the Companies Registry, the company’s directors include Fong Fu-wah, Jonathan Fong Tim-fai, Raymond Fong Man-cheong, David Fong Man-hung, and Vincent Fong Tim-ming – all of whom are family members of the late Henry Fong Yun-wah, chairman of the Hong Kong-based developer Hip Shing Hong.

The company purchased the shop unit in 1971 for about HK$940,000. Having held the property for 55 years, it realised a paper profit of HK$20.46 million – an increase of nearly 22-fold.

Stanley Poon Chi-ming, managing director at Centaline Commercial, stated that Hip Shing Hong had held the property for a long time, using it primarily for rental income, and kept a low profile regarding its sale.

“Hip Shing Hong is a long-established local developer; it has primarily focused on rental income and rarely sells properties,” he said. “However, the company has been restructuring its property portfolio and offloading non-core commercial real estate to reduce its holdings.”

Centaline Commercial has assisted Hip Shing Hong in selling some of its assets, such as its office space in Mong Kok.

Hip Shing Hong’s current strategy focuses on selling off scattered, non-core properties to generate cash for future land acquisitions and development, Poon noted.

According to the Land Registry, the new buyer of the retail shop is Aimba Limited. The company’s director is Oliver Michael Spiesshofer, a descendant of Johann Gottfried Spiesshofer – one of the founders of the Swiss-headquartered undergarment group Triumph International – and the current CEO and managing partner of the company.

Poon noted that this transaction is “extremely rare”, as foreign capital has historically seldom been used to purchase retail properties, especially street shops, in Hong Kong.

“The vast majority of local retail properties are purchased by Hong Kong investors and companies, as locals are more familiar with the market,” he said. “Chinese [investors] have a particular fondness for such properties – adhering to the saying that ‘a single shop can support three generations’.”

Edwin Lee, founder and CEO of Bridgeway Prime Shop Fund Management, described the property as an “excellent buy”. The shop features a large floor area and is located in an area with strong purchasing power for high-end consumption near SoHo and Lan Kwai Fong.

“The tenant is a private club, and the premises feature high-quality fit-outs,” Lee added.

“Based on the current transaction price, achieving a 4 per cent yield would require a monthly rent of around HK$70,000 (US$8,920.1) to HK$80,000 – a rate that is certainly achievable for this location – and I believe the risk of such an upscale tenant vacating is minimal.”

“I believe the transaction price is 20% lower than the market price,” Lee said.