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A $1 billion, 21-year renewal lease on a prime retail and office site in Hong Kong has been signed.

Wharf Holdings Ltd., one of Hong Kong's largest commercial landlords, has renewed its lease at Ocean Terminal, a historic 922,467 square-foot (85,700 square-meter) shopping and office complex in Tsim Sha Tsui, a key tourist hub, for another 21 years with the city-state government.

The agreement was the largest of its kind in the Asia-Pacific corridor this year. find property qatar

Wharf will pay a land premium of HK$7.9 billion ($1.02 billion US) and an annual rent of 3% of the "rateable" value of the Ocean Terminal lot, according to a prepared statement. This equates to approximately HK$690 per square foot.

Analysts predicted that Wharf will have to pay a higher price. Wharf was expected to pay around HK$9 billion last month, according to Credit Suisse, while CLSA projected it would be whacked for HK$12.5 billion. Some Hong Kong real estate agents believe Wharf struck a special arrangement with the government before of the lease renewal deadline.

Peter Woo Kwong-ching, a tycoon, is in charge of Wharf. He was formerly a major contender for the position of Hong Kong's top executive, also known as a Special Administrative Region (SAR).

The Ocean Terminal complex brought in roughly HK$701 million in pretax rental income last year, according to Wharf.

Wheelock & Co., a Hong Kong-based mega conglomerate that has been in business since 1857, is Wharf Holdings' parent company. Wheelock is a global property investment, logistics, communications, media, and entertainment company.

Hong Kong's retail rents have risen in the recent decade, according to Asia-Pacific real estate analysts, owing to mainland Chinese shoppers seeking tax-free luxury apparel and accessory brands.

Since early 2009, shares in Wharf, which also owns the Times Square shopping mall in the city's Causeway Bay region, have nearly doubled on the Hong Kong stock exchange.

Wharf also owns Harbour City, an office and 700-shop mall complex adjacent to Ocean Terminal. On the west bank of Tsim Sha Tsui, the Ocean Terminal site was previously a wharf pier. It was rebuilt and expanded to serve as a cruise terminal and a multi-story shopping center.

The Ocean Terminal, which cost HK $70 million to build, opened in March 1966. It was Hong Kong's largest retail center at the time, with 112 stores.

According to Wikipedia, Ocean Terminal's yearly berth utilization rate increased to 76 percent last year from 71 percent the previous year. The Terminal has two berths that can accommodate ships up to 50,000 tons.

According to Wikipedia, demand for space at Ocean Terminal was so high that between 2001 and 2005, 11 cruise ships were forced to berth mid-stream and at container terminals because Ocean Terminal could not meet market demand.

Tsim Sha Tsui (abbreviated as TST) is a Hong Kong urban region in southern Kowloon. Administratively, the area is part of the Yau Tsim Mong District. Tsim Sha Tsui East is a piece of land east of Tsim Sha Tsui that was reclaimed from the Hung Hom Bay. Austin Road runs through the neighborhood on the north side, and Hong Chong Road and Cheong Wan Road go through it on the east.

Tsim Sha Tsui is a cape on the tip of the Kowloon Peninsula that faces Victoria Harbour and is located opposite Central. Before Kowloon was given to the British Empire in 1860, several communities had been constructed in this vicinity.

In Chinese, Tsim Sha Tsui means 'pointed sandy mouth.' It was also known as Heung Po Tau, an incense tree exporting port.

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