Melco International Development, the owner of the iconic Jumbo Kingdom floating restaurants, is seeking to sell an eight-storey car park in Hong Kong, as renewed speculative interest in vehicle parking bays amid record prices created a second chance to divest the asset.
The Jumbo Court Carpark, owned by Melco’s subsidiary Aberdeen Restaurant Enterprises and attached to a residential building near the Wong Chuk Hang subway station, has the capacity for 509 cars. Melco, chaired by Lawrence Ho Yau-lung of the Macau clan that dominates the world’s largest casino market, has set a guidance price of HK$500 million (US$64.5 million), according to the sole sales agent Savills on Monday.
The company is inviting bids through tender, and the property will be sold on an “as-is” basis, it added. The tender closes on July 15.
Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.
The asking price “is quite reasonable,” as it values each bay at less than HK$1 million on average, said Vincent Cheung, managing director of Vincorn Consulting and Appraisal.
“It should attract many bidders as the car park segment has seen a strong recovery recently,” Cheung said, adding that the rent for each parking bay could easily fetch HK$5,000 a month, giving a yield of 6 per cent.
Aberdeen Restaurant tried to sell the car park for more than HK$500 million in 2017 as a part of “a total revitalisation” plan at Jumbo Kingdom, Ho said at the time. But it failed to find a buyer.
Car-parking space, as an investment asset class, is again witnessing increasing transactions in Hong Kong as sentiment improves among property investors, who are taking advantage of the extra stamp duty on non-residential transactions that was eliminated in November. Sales of car parking bays jumped 18 per cent month on month in May, according to Ricacorp Properties.
Poon Ho-tak, executive director of Hong Kong’s textile company Texwinca Holdings, last week paid HK$35.7 million for three car-parking bays in his luxurious Mount Nicholson villa, setting a world record of US$1.53 million for each space. The purchase by Poon, 43, smashed the previous record set in 2019 when an office parking bay changed hands at one of the city’s tallest buildings.
The late Macau casino tycoon Stanley Ho Hung-sun opened the Jumbo Kingdom Floating Restaurant in 1976. His company later acquired the Tai Pak Floating Restaurant in 1987. Both restaurants, located in Aberdeen Harbour on the south side of Hong Kong Island, are collectively known as Jumbo Kingdom.
Melco closed the restaurants in March 2020 as the coronavirus outbreak slammed the food and drinks industry in Hong Kong.
In its heyday as a tourist landmark Jumbo served millions, including royalty and film stars from Queen Elizabeth to Gwyneth Paltrow and Tom Cruise. It has even featured in films like Roger Moore’s James Bond: The Man With the Golden Gun (1974), Steven Soderbergh’s Contagion (2011) and Jackie Chan’s The Protector (1985).
The development of Southside, a project comprising 5,200 residential units and 510,000 sq ft of retail space above the Wong Chuk Hang subway station, will create demand for parking space when it opens in 2023, said Savills’ managing director and head of investment and sales Peter Yuen.
“The government’s initiative to invigorate the Island South area, which includes a revamp of Ocean Park and redevelopment of old industrial buildings in Wong Chuk Hang, will also lead to demand for additional parking,” he said.