London Daily

Focus on the big picture.
Thursday, Jul 10, 2025

China thwarts US sale of multimillion-dollar real estate in Hong Kong

China thwarts US sale of multimillion-dollar real estate in Hong Kong

The snag is akin to a water-down version of freezing US assets in Hong Kong, said Kevin Tsui, associate professor in the John E. Walker department of economics at Clemson University in South Carolina. “They can use it, but they cannot sell it,” he said.

One of Hong Kong’s biggest real estate transactions of 2020 has been caught in the crossfire of souring US-China diplomatic relations, as the United States consulate failed to get its sale of luxury villas on The Peak recognised by the city’s Land Registry.

The HK$2.6 billion (US$330 million) sale on September 10 of six multi-storey villas at 37 Shouson Hill Road could not be registered by Hong Kong’s Land Registry because of “diplomatic obligations” imposed by the Chinese government on the US consulate, buyer Hang Lung Properties said in an exchange filing on Wednesday. Hang Lung bought it for a 20 per cent discount to the valuation.

The developer said it was informed by the Land Registry on December 21 that the US consulate is not a commercial entity, and the Shouson Hill villas are not an ordinary real estate property. The transaction involved foreign affairs between China and the US and should not be regarded as an ordinary commercial activity, it added.

The US government must submit a written application to the Chinese government via the Office of the Commissioner of the Ministry of Foreign Affairs of China in the city with at least 60 days’ notice, Hang Lung said, citing an advisory from the Chinese government to the local authority.


An aerial view of 37 Shouson Hill Road on The Peak on Hong Kong Island on May 30, 2020.


“There is a possibility that the transaction will be dropped,” said Vincent Cheung, managing director at Vincorn Consulting and Appraisal in Hong Kong. “The letter made it rather clear that the deal is not just a property transaction, but carries a political meaning. Whether it can move forward only depends on the relationship between US and China. If the Chinese government gives its approval, it would represent a gesture of goodwill.”

The snag was “exceptional” and was not made known to, or anticipated by, by either Hang Lung or the tenderer of the property at the time of the sale, Hang Lung said. Still, Hang Lung said that it is “willing and able to proceed” with the deal after “careful consideration,” if the US can comply with the diplomatic obligations.


Ronnie Chan Chi-chung, chairman of Hang Lung Properties, during a press conference in Hong Kong on January 21, 2020.


The Chinese government weighed in on Wednesday afternoon. “US embassies must apply to buy, sell real estate,” said foreign ministry spokesman Wang Wenbin during a regular press briefing in Beijing.

Hang Lung’s investors appear to have been lukewarm about the developer’s purchase. Shares of the company have fallen 2.4 per cent since Hang Lung won the tender on September 9, underperforming the 10.3 per cent gain in the benchmark Hang Seng Index. The stock rose by 2.1 per cent to HK$20.15 after today’s statement, the highest in more than a month, and reversing its earlier decline.

Such a setback is “unprecedented, and much should have been done prior to the sale,” said Polly Chu, partner at the law firm Withers in Hong Kong. The buyer should consider seriously whether to buy, or request to revise the tender terms to extend the completion date, with the right to termination if written consent is not obtained, she said

The US consulate said it complied with the relevant obligations and requirements, while arguing that “diplomatic obligations applicable to the sale of the property are matters between sovereignties and would not affect title of the property,” Hang Lung said, citing a letter yesterday by the US representative office.


The newly-renovated Plaza 66, Hang Lung’s flagship property project in Shanghai, on September 8, 2013.


The developer and the tenderer are “evaluating and taking legal advice” on appropriate actions, “including exploring the feasibility of extending the time” for completing the deal, Hang Lung said.

“Additional time is needed for the buyer and seller to complete the administrative processes required for closing on the property,” said a spokesperson at the US consulate’s office in Hong Kong, declining to say whether a written application had been sent to the Chinese government for the sale.

Hang Lung’s chairman, the billionaire Ronnie Chan Chi-chung, is a frequent interlocutor on China-related affairs, and does not shy from having verbal jousts with journalists on political issues including Hong Kong’s year-long anti-government protests and the national security law enacted by the Chinese legislature for Hong Kong.

Born in 1949, Chan is also chairman of the board of trustees of the Asia Society in Hong Kong, a non-profit organisation founded in 1956 by John D. Rockefeller III, with the mission of educating the world about Asia.

Hang Lung has been investing in China since the 1990s, starting with its landmark Plaza 66 and Grand Gateway 66 projects in Shanghai. It has been expanding its presence in secondary cities such as Shenyang, Jinan, Wuxi, Tianjin, Dalian, Kunming, Wuhan and Hangzhou with projects under the “66” brand. The company achieved HK$4.54 billion revenue from property leasing in China, accounting for 53 per cent of the company’s 2019 total revenue.


The US government bought the land at 37 Shouson Hill Road in June 1948 for an unknown price when Hong Kong was still a British colony, according to public records at the Land Registry. Construction on the site was completed in 1983.

Hang Lung, which mainly develops shopping centres and offices, said it will redevelop the Shouson Hill Road site into multiple luxury detached houses by 2024, with plans to invest HK$4 billion in the project.

Details of the tender came to light on May 30 hours after US President Donald Trump announced that he would revoke Hong Kong’s special customs status, in response to the Chinese legislature’s announcement introducing the national security law for the city.

“It’s more about the Chinese government trying to impose hurdles for the US in selling the property,” said Kevin Tsui, associate professor in the John E. Walker department of economics at Clemson University in South Carolina, adding that the latest snag is a watered down version of freezing US assets in Hong Kong. “Perhaps [the Chinese government] sees it as a test of the new [Biden] administration,” using it as a bargaining chip, he said.

The asset sale has to “wait until Biden becomes president and [the US and China]] start their negotiation,” Tsui said, and the saga will last until “their relationship becomes better. The US can still use the asset, but they are not allowed to sell it,” he added.

Newsletter

Related Articles

0:00
0:00
Close
Severe Heatwave Claims 2,300 Lives Across Europe
NVIDIA Achieves Historic Milestone as First Company Valued at $4 Trillion
Declining Beer Consumption Signals Cultural Shift in Germany
Linda Yaccarino Steps Down as CEO of X After Two Years
US Imposes New Tariffs on Brazilian Exports Amid Political Tensions
Azerbaijan and Armenia are on the brink of a historic peace deal.
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Weinstein Victim’s Lawyer Says MeToo Movement Still Strong
U.S. Enacts Sweeping Tax and Spending Legislation Amid Trade Policy Shifts
Football Mourns as Diogo Jota and Brother André Silva Laid to Rest in Portugal
Labour Expected to Withdraw Support for Special Needs Funding Model
Leaked Audio Reveals Tory Aide Defending DEI Record
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
London Stock Exchange Faces Historic Low in Initial Public Offerings
A new online platform has emerged in the United Kingdom, specifically targeting Muslim men seeking virgin brides
Trump Celebrates Independence Day with B-2 Flyover and Signs Controversial Legislation
Boris Johnson Urges Conservatives to Ignore Farage
SNP Ordered to Update Single-Sex Space Guidance Within Days
Starmer Set to Reject Calls for Wealth Taxes
Stolen Century-Old Rolls-Royce Recovered After Hotel Theft
Macron Presses Starmer to Recognise Palestinian State
Labour Delayed Palestine Action Ban Over Riot Concerns
Swinney’s Tax Comments ‘Offensive to Scots’, Say Tories
High Street Retailers to Enforce Bans on Serial Shoplifters
Music Banned by Henry VIII to Be Performed After 500 Years
Steve Coogan Says Working Class Is Being ‘Ethnically Cleansed’
Home Office Admits Uncertainty Over Visa Overstayer Numbers
JD Vance Questions Mandelson Over Reform Party’s Rising Popularity
Macron to Receive Windsor Carriage Ride in Royal Gesture
Labour Accused of ‘Hammering’ Scots During First Year in Power
BBC Head of Music Stood Down Amid Bob Vylan Controversy
Corbyn Eyes Hard-Left Challenge to Starmer’s Leadership
London Tube Trains Suspended After Major Fire Erupts Nearby
Richard Kemp: I Felt Safer in Israel Under Attack Than in the UK
Cyclist Says Police Cited Human Rights Act for Riding No-Handed
China’s Central Bank Consults European Peers on Low-Rate Strategies
AI Raises Alarms Over Long-Term Job Security
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Musk Battles to Protect Tesla Amid Trump Policy Threats
Air France-KLM Acquires Majority Stake in Scandinavian Airlines
UK Educators Sound Alarm on Declining Child Literacy
Shein Fined €40 Million in France Over Misleading Discounts
Brazil’s Lula Visits Kirchner During Argentina House Arrest
Trump Scores Legislative Win as House Passes Tax Reform Bill
Keir Starmer Faces Criticism After Rocky First Year in Power
DJI Launches Heavy-Duty Coaxial Quadcopter with 80 kg Lift Capacity
U.S. Senate Approves Major Legislation Dubbed the 'Big Beautiful Bill'
Largest Healthcare Fraud Takedown in U.S. History Announced by DOJ
×