HNA Group Co. Ltd. is looking to borrow up to HK$5 billion to refinance and develop a residential land in Hong Kong's Kai Tak area, local media Apple Daily reported.
The Chinese conglomerate's subsidiary, Hong Kong International Construction Investment Management Group Co., Ltd., or HKICIM, bought the Kai Tak 1L Site 2 site for HK$7.44 billion in March 2017, which translates to an average price of HK$13,500 per square foot, according to the May 29 report.
The site is the company's sole housing project at the former airport site in Kai Tak after it sold three of the four land parcels it owned in the area to local developers in the first quarter amid mounting financial pressure.
Instead of divesting its final land parcel, HNA is planning to develop the Kai Tak 1L Site 2 independently as it is optimistic about the prospects of the Kai Tak Development area and about Hong Kong's property market.
HKICIM secured a one-year bridge loan of HK$2.2 billion in June 2017 from DBS and Chiyu Banking Corp. Ltd. at a rate of Hong Kong Interbank Offer Rate plus 1.9% to develop a project on the 102,063-square-foot plot. The loan will be due next month.
According to Apple Daily, HKICIM is in preliminary talks with DBS Group Holdings Ltd. and is also planning to invite several banks to provide refinancing and a fresh construction loan of about HK$4 billion to HK$5 billion for the site at a rate of Hibor plus 3%.
Sun Hung Kai Properties Ltd. acquired a residential site in the Kai Tak area earlier in May with an average price of HK$17,776 per square foot, 30% higher than that of HNA's Kai Tak 1L Site 2.
