Beijing Order Thwarts Sale Of US Compound

Hang Lung Properties has announced that it could not complete its HK$2.6 billion acquisition of the US consulate staff compound on Shouson Hill Road as scheduled on Wednesday, when a deadline for the transaction was supposed to expire.

In a statement given to the local stock exchange, the developer said it was informed by the Land Registry on December 21 that the compound was not a commercial entity, nor an ordinary real estate property.

The SAR administration said it had been told by the central government that the US consulate must make a written application to Beijing at least 60 days before the transaction, Hang Lung explained.

But the developer said the US side contested the requirement, saying it has complied with the relevant obligations.

Both the US and Hang Lung agreed that the transaction and its completion involve foreign affairs and diplomatic matters, according to the stock exchange announcement.

Hang Lung said it is evaluating the deal and taking legal advice on possible actions, including extending the time for completion.

A US consulate spokesman told RTHK that both sides need additional time to complete the administrative processes to close the transaction.

The sale of the luxury property at 37 Shouson Hill Road was announced in September, with the US Consulate saying it was a business decision and unrelated to the icy ties between Beijing and Washington.