Hongkong Land, the largest commercial landlord in Central District of Hong Kong, announced on June 26 that it will transform its Landmark property.
A total of US$1 billion ($1.36 billion) will be invested into this transformation. Hongkong Land will invest about US$400 million, while 10 long-standing retail anchor tenants at Landmark will invest a total of about US$600 million.
They include luxury retail brands such as Cartier, Chanel, Dior, Louis Vuitton, Prada, Saint Laurent, Sotheby’s, Tiffany & Co and Van Cleef & Arpels.
As part of the revamp, 10 multi-storey “Maison destinations” will be created. The tenants will more than double their footprints to over 220,000 sq ft. Once completed, Landmark will house over 200 tenants in total.
Hongkong Land did not disclose the total investment amount for the transformation or the amount invested by the individual fashion houses.
According to the group, fashion houses are keen on expanding their Hong Kong flagship stores in Landmark. After the revamp, their Landmark rental agreement with the group will not be affected.
See also: ISDN banks on 'triangle of solutions' from motors to robots for growth
Hongkong Land says the capital expenditure will be funded over three years. As at March 31, the group’s gearing and committed liquidity stand at 16% and US$3.1 billion respectively.
The group expects a temporary and moderate reduction in rental income during the redevelopment. However, as the upgrading takes place in phases, the entirety of the property will not be closed.
Preparation works on the transformation have already started. Auction house Sotheby’s is expected to launch this month while two brands are expected to open every year from 2025 to 2028. The Landmark Mandarin Oriental will also reopen in 2025.
See also: Plaza Premium elevates travel experience by constantly fine-tuning F&B offerings
Hongkong Land expects the investment to deliver “stronger growth” in tenant sales and retail income after the upgrading, with new stores contributing better rental income.
To accommodate the growth of retail areas, the group is converting the two lowest levels of office space in Prince’s Building and Gloucester Tower. The group will also relocate the bar and lobby of Landmark Mandarin Oriental. The affected office tenants will be relocated to other office properties within Hongkong Land’s portfolio.
Michael Smith, CEO of Hongkong Land, says: “The considerable investments Hongkong Land and its strategic partners are making are not only a powerful endorsement of Central’s enduring role as the city’s iconic business and lifestyle hub but also demonstrate our shared, unwavering confidence in Hong Kong’s future as a global financial centre.”
As of Dec 31, 2023, Hongkong Land recorded US$957 million in gross revenue from its Central portfolio in 2023, while its portfolio valuations for its properties located in Central came up to US$24.8 billion.
The group says it intends to replicate the success of its retail properties in Hong Kong in its China properties.
On June 24, Hongkong Land announced the grand opening of The Ring in Chengdu, China. This marks its first wholly-owned commercial property in the city and the second “The Ring” series development after “The Ring, Chongqing” opened in 2021.
The Ring, Chengdu, spans about 22,000 sq m of gross floor area, blending world-class design with ecological elements and international art installations. The mixed development encompasses retail, dining, leisure, office space, hotels and commercial facilities.
The seven-storey property incorporates an 11,000 sq m shopping space and a 90,000 sq m grade-A office tower. The two office towers, named Ring Centre, will house local corporate headquarters. A 22,000 sq m Hyatt hotel will also be a part of the development.
