The $ 332 million planned sale by the U.S. government of an exclusive property in Hong Kong was called into question by the Chinese government, which has determined that the transaction needs approval.
In September, the United States reached an agreement to sell a residential complex for consulate staff to Hang Lung Properties Ltd.
, a Hong Kong real estate developer. The scenic property, in a high-end neighborhood called Shouson Hill, includes six low-rise buildings with 26 apartments and a rooftop pool.
A U.S. consulate representative in Hong Kong said earlier that the sale of the Shouson Hill enclosure was purely the result of a business decision, taken as part of a global reinvestment program by the State Department.
The deal did not close on December 30 as planned. On Wednesday, Hang Lung said the Hong Kong Property Registry reported last week that the sale could not be completed without the written consent of the Chinese government.
The imposition of national security law in Hong Kong by China this year has helped provoke tensions between Washington and Beijing. In recent months, the Trump administration has imposed sanctions on senior government officials in China and Hong Kong for actions that, according to the U.S., have eroded Hong Kong’s autonomy.
A December 21 letter from the Property Registry stated that the U.S. Consulate General in Hong Kong “is not a commercial entity and that the property is not ordinary real estate,” the developer said in a regulatory filing.
He added that the sale of the site “involves foreign affairs between the People’s Republic of China and the United States and should not be considered as an ordinary commercial activity.”
The letter said the Chinese central government had warned the Hong Kong government that the United States must submit a written request at least 60 days before renting, buying or selling any property in the city. He also said the U.S. needs the written consent of the central government before proceeding with any transaction.
The United States has responded to the need to meet these requirements, but agreed that it is a transaction related to foreign affairs and diplomatic affairs, according to Hang Lung’s statement.
Chinese Foreign Ministry spokesman Wang Wenbin said Wednesday during a regular press conference that China’s requirement is “in accordance with the principle of reciprocity,” referring to U.S. regulations on real estate management of foreign embassies and consulates in America.
On Wednesday, a spokesman for the U.S. consulate in Hong Kong said, “Additional time is needed for the buyer and seller to complete the necessary administrative processes to close the property.”
The State Department “is not free to comment on the specific conditions of ongoing contractual transactions,” he added.
The Shouson Hill property was acquired by the US government in 1948, when Hong Kong was under British rule. Hang Lung is confident of redeveloping the 94,796-square-foot site into luxury detached homes.
Write to Chong Koh Ping to [email protected]
Copyright © 2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8