Hong Kong property developer Hang Lung Properties said the closing of the company’s purchase of a property at the U.S. Consulate General in Hong Kong could not be completed recently as planned due to diplomatic factors.
In an announcement on Wednesday (Dec. 30), the company explained that it received a notice from the Hong Kong Land Registry last week that the transaction involved Sino-U.S. diplomatic affairs and was not an ordinary business practice. The announcement said the transaction was beyond the control of Hang Lung Properties and the related procedures could not be completed around noon Wednesday as originally scheduled.
The property of the U.S. Consulate General, located at 37 Shouson Village Road in the southern district of Hong Kong Island, is the senior staff quarters building of the Consulate General and currently has six three-story buildings with an outdoor swimming pool and covers an area of about 94,796 square feet, or about 10,522 square meters. The U.S. government purchased it in 1946 and has held it for 72 years.
In May this year, the U.S. government announced that the U.S. Consulate General in Hong Kong intended to sell the property for the purpose of “reallocating overseas assets”, and on June 2, the Consulate General held a formal public bidding. Due to the tense relationship between the U.S. and China at the time, the U.S. decision drew widespread attention and was widely seen as a sign that the U.S. diplomatic community was preparing to leave Hong Kong.
In the end, Hang Lung Properties won the bid in September with a price tag of $330 million.
Chinese Foreign Ministry spokesman Wang Wenbin also confirmed the “diplomatic problems” encountered by Hang Lung on Wednesday. Wang Wenbin told a regular press conference on the same day that in view of the U.S. regulations on real estate management of foreign embassies and consulates in the United States, according to the principle of reciprocity, China requires U.S. embassies and consulates in China, including the Consulate General in Hong Kong, to submit written applications to China 60 days in advance when leasing, acquiring, selling or in any other way acquiring or disposing of real estate, as well as implementing new construction, alteration, expansion, repair and other works on the premises, and The U.S. Consulate General in Hong Kong will provide detailed consultation to the Chinese side and will only go through the relevant procedures after receiving written consent from the Chinese side.
A spokesman for the U.S. Consulate General in Hong Kong told Reuters that both the buyer and seller need more time to complete the property transfer procedures. The spokesman would not comment on the specific terms of the contract deal currently underway.
According to Hong Kong media reports, the U.S. side disputes the need to comply with the diplomatic obligations raised by the Chinese Foreign Ministry.
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