Hong Kong Scores With Citigroup -- Plots & Ploys

By Dow Jones Business News, 
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Hong Kong Scores With Citigroup -- Plots & Ploys


Citigroup Inc. is banking on Hong Kong.

The financial firm has bought a $700 million office development under way in Hong Kong'sKowloon district. It is described by Realtors as the largest single office transaction ever undertaken in the city.

The twin-tower development, with about one million square feet, will house most of Citigroup's 5,000 employees in Hong Kong who are spread out around the city.

Citigroup's big bet on Hong Kong comes as rival regional financial hubs grow in prominence. China's government is pushing a new free-trade zone in Shanghai to expand that city as a banking center. Singapore, too, continues to battle Hong Kong for new business.

The bank is buying the development from Wheelock Properties Ltd. The 21-story tower is slated to be completed by the end of 2015.

The deal "underlines our belief and confidence in Hong Kong's continued growth as a leading global financial center and hub for some of our core regional businesses," said Stephen Bird, chief executive officer for Citigroup in the Asian-Pacific region.

CBRE Group Inc. acted as adviser on the office sale.

Enda Curran Live at Five

Times Square office building values are reaching towering heights.

Landlord AVR Realty Co. on Tuesday closed on the $1.5 billion sale of 5 Times Square, home to Ernst & Young's U.S. headquarters, to a group led by investor David Werner, according to both the buyer and seller. That represents a big gain from the $1.28 billion AVR paid when it bought the one-million-square-foot building back in the market's peak in early 2007.

It also is the second big transaction in the area in the past year. Norway's sovereign-wealth fund last fall bought a 45% stake in 7 Times Square from Boston Properties Inc. for $684 million.

The deal for 5 Times Square has been in the works for months. Last year, AVR tapped a team at real-estate advisory firm Eastdil Secured led by Douglas Harmon and Adam Spies to market the building.

They began negotiating with Mr. Werner in the fall, ultimately closing the deal on Tuesday.

Eliot Brown High-Tech Hotel

A pair of hotel investors are paying a record price for a top-ranked luxury hotel in downtown Seattle.

Thayer Lodging Group and Provenance Hotels have agreed to purchase Hotel 1000 from a local developer for $63 million, or about $525,000 a room, according to people familiar with the matter. That is the highest price on a per-room basis for any Seattle hotel, according to JLL Hotels & Hospitality.

Hotel 1000 opened in 2006 and quickly established itself as one of the most high-tech lodging spots. Trip Advisor readers rank it No. 1 of 95 Seattle hotels.

Rooms have an infrared sensor that detects body heat and alerts housekeeping that someone is still in the room, so they know not to come in. The hotel also offers a virtual golf course, enabling users to simulate a round at 50 famous golf courses throughout the globe.

Provenance will manage the property, adding to its collection of 13 hotels, primarily in the Pacific Northwest. Provenance President Bashar Wali said the hotel acquisition was a rare opportunity because "very little trades in Seattle."

Craig Karmin

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