Hang Lung Properties: China-US ties hold up property deal with Hong Kong consulate

Hang Lung Properties

HONG KONG (Reuters): Hong Kong developer Hang Lung Properties said it was unable to complete the US consulate’s purchase of property as scheduled on Wednesday (Dec 30) because it involved China-US foreign relations.

After that, in an upscale location in the financial centre, the new twist in the US$331.5 million transaction comes in the midst of rising uncertainty over a host of issues between the world’s two largest economies.

The developer, who agreed in September to purchase the property used to house U.S. consulate employees. It said in a Wednesday filing that last week it received a letter from the Land Registry. It illustrate that the property is “not an ordinary real estate property”

US, China And Hong Kong

According to the letter, the Chinese Government told the Government of Hong Kong that if the Consulate General of the United States intends to rent, buy or sell any real estate in Hong Kong, the Government of the United States of America must send a written request to China at least 60 days before the agreement is concluded. Also, the agreement shall not proceed without the written consent of the Government of China.

“The matters as stated in the letter were exceptional and were not made known to or anticipated by (Hang Lung)”. The developer said.

It claimed that on Tuesday, after informing the United States, the US questioned the need to comply with diplomatic obligations and did not provide the evidence as requested.

Hang Lung Properties

The group is currently reviewing the various acceptable steps and taking legal advice on them. It is including investigating the possibility of expanding the time for completion of the contract.

Furthermore, a spokesperson for the US Consulate told Reuters that it takes additional time for the buyer and seller to complete the administrative procedures needed for the property to be closed. And that the department is not free to comment on the precise terms of ongoing contractual transactions.

Property consultants said many developers in mainland China and Hong Kong were reluctant to pursue a bid during the tender for the property. It is because it was seen as politically sensitive.

In 1997, the former British colony went back under Chinese rule.

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China-US ties hold up property deal with Hong Kong consulate: Hang Lung Properties

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