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Case Study | Mineron Centre: Brokerage

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Location (City)

Asset Type

Transaction Date

Size (Sqm)

Value (USD)

Fan Ling (Hong Kong)

Industrial
26 July 2021
14,192

89.16 million

 

Buyer: CR Logistics

Seller: Tang Family

Services provided: Brokerage

 

The Challenge

• Price expectation gap
The vendor’s initial pricing expectation was much higher than prospective acquirers were willing to pay. The acquirer had met with several valuers, who were not able to come close to the vendor’s asking price.

• Complex transaction structure
Additionally, the transaction requirements of the asset and the vendor was fairly complex, and came with a waiver letter for revitalization of the asset.

The Strategy

Colliers was able to advise both parties on a suitable solution to overcome the waiver issue, with both parties entering into a legally binding SPA first with the termination of the waiver letter and the registration of the termination letter at the Land Registry as conditions precedent to completion.

Both parties agreed.

The Solution

Colliers compiled recent market transaction to work with the acquirer in improving the bid. Additionally, the team lined up a leasing interest in the satellite space to provide an attractive leasing LOI, as a justification of value for the asset to the acquirer.

Through much discussion and negotiation with both the vendor and the acquirer, Colliers was able to work with both parties to come to an agreement alongside a separate acquisition that was concurrently being executed with the both parties. This resulted in both parties being able to come to an agreed price for the asset.

The Result

CRC Logistics and Tang Family eventually entered legally binding SPA in the amount of HK$695.42m in July 2021.

 

“We observed robust investment activities in industrial assets in Fanling in the first half of this year, and the average per square foot price for these assets has picked up tremendously. As a state-owned logistics player, we are keen to extend our logistics footprint and am happy to co-operate with Colliers in the Mineron acquisition. The team has demonstrated very good knowledge in the market, exceptional relationship with market players and an attitude to provide round-the-clock agency services to their clients, which is extremely important in a competitive market like Hong Kong.”

 

-- Helen Zhao, Director, CR Logistics

 

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