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Agreement executed for exchange of FSI property at Cornwall House, Taikoo Place
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     The Government Property Agency announced today (February 28) the execution of an agreement for exchange with Cityplaza Holdings Limited (CPHL) and Taikoo Place Holdings Limited (both subsidiaries of Swire Properties Ltd) for the exchange of the Financial Secretary Incorporated (FSI) property at Cornwall House, Taikoo Place (an industrial building) for CPHL's property at Cityplaza Three, Taikoo Shing (a Grade A office building).
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     The relevant FSI property consists of the 7th, 8th, 9th, 10th, 11th, 12th, 13th and 14th floors (including the flat roof on the 14th floor), Unit A on the 1st floor, and Cargo Loading Bays Nos. F1 and F2 on the 1st floor of Cornwall House, No. 979 King's Road, Hong Kong (the Cornwall House Property) with a total gross floor area of about 17,400 square metres, while CPHL's property consists of 10 floors of Cityplaza Three (also known as Cityplaza 3), No. 14 Taikoo Wan Road, Hong Kong (CP3 Property) with a total gross floor area of about 19,000 sq m.

     Swire Properties Ltd plans to redevelop Cornwall House (currently partly owned by FSI), Somerset House and Warwick House at Taikoo Place into two Grade A office buildings. The redevelopment was supported by the Land and Development Advisory Committee, and the Master Layout Plan of the "Comprehensive Development Area" zone of Taikoo Place was approved by the Town Planning Board. It is noted that the redevelopment would provide additional Grade A office space (with total gross floor area of 187,000 sq m) in the market and create additional open space (6,400 sq m) for enjoyment by the community. It will help rejuvenate the Quarry Bay area and bring town planning benefits to the community.

     In addition to the CP3 Property, CPHL will make a cash compensation of HK$537,000,000 to the FSI. A further payment will be made with reference to the subsequent change in the price index of Grade A office compiled by the Rating and Valuation Department upon completion of the redevelopment. The package reflects the redevelopment potential of the Cornwall House Property and any appreciation in office property value up till the completion of the redevelopment. CPHL is also responsible for carrying out the fitting-out works of the CP3 Property for FSI in accordance with Government office standard and at its own cost, and will reimburse the FSI for the related costs incurred in the exchange. Public interest is well safeguarded in the transaction.

     The Cornwall House Property is currently occupied by six departments, including the Printing Workshop of the Government Logistics Department. The affected departments will be relocated to other appropriate accommodation or the CP3 Property on the basis of operational requirement. The exchange will not affect the operation of the departments concerned.

     With the gradual change of Taikoo Place from an industrial area into a business area, the exchange is consistent with Government policy to relocate non-office functions away from business areas and to increase the supply of Grade A office space in the market.

     The completion of the property exchange is expected to take place no later than December 30, 2016.

Ends/Friday, February 28, 2014
Issued at HKT 18:33

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