Swire Properties Ltd. and its partners have agreed to buy an office building from Citic Pacific Ltd. in Hong Kong’s Island East district, where the developer is seeking to expand its dominance as rents rise.
The buyers will pay HK$3.9 billion ($503 million) for the DCH Commercial Centre. Swire Properties will own 50 percent, while two partners will hold the rest, according to a company statement to Hong Kong’s stock exchange today that didn’t identify the partners.
The transaction will help Swire Properties step up its expansion in Island East, where it already has 8.84 million square feet (821,260 square meters) of office, retail, hotel and residential development, according to its website. Office rents in the area have been rising as financial-services companies in the city seek alternative locations outside the Central business district, which has the world’s second-most expensive office occupancy cost, according to CBRE Group Inc.
Swire Properties’ shares have fallen 25 percent this year in Hong Kong, compared with a 1 percent increase in the benchmark Hang Seng Index.