U.S. to Sell Hong Kong Consulate Housing Amid Rising Tensions

A vehicle drives past barricades along a road as building stand in rain in Hong Kong, China, on Saturday, May 30, 2020. An overwhelming majority of Hong Kong residents said they oppose a controversial new security legislation that China plans to impose on the city, a move that has generated criticism from western democracies amid concerns over basic freedoms in the financial hub.

(Bloomberg) -- The U.S. government is selling its Hong Kong consulate staff quarters, estimated to be worth more than $400 million, amid rising tension over the city's future.

The compound is located in Shouson Hill, on the southern side of Hong Kong Island, where some of the city's richest tycoons, including Li Ka-Shing, own houses. Comprising several apartment buildings spread over almost 95,000 square feet (8,825 square meters) of land, the property is worth between HK$3.1 billion ($400 million) and HK$3.5 billion, according to Vincorn Consulting and Appraisal Ltd.

The moves comes as protests rock Hong Kong and tensions rise between the U.S. and China over new Beijing-backed national security legislation in the city, that critics say will restrict freedoms in the former British colony. President Donald Trump said Friday the U.S. would begin the process of stripping some of Hong Kong's privileged trade status without detailing how quickly any changes would take effect.

“The State Department's Bureau of Overseas Buildings Operations regularly reviews the U.S. government's overseas real estate holdings as part of its global reinvestment program,” a department representative said in an email Sunday. “As part of that program, the State Department has decided to sell the Shouson Hill property.”

The department will invest in enhancing other U.S. government-owned assets in Hong Kong, including the Consulate General's office building, the representative said.

Despite the sensitive timing, property agents say the sale is likely to be purely a business decision.

“This has been quite a phenomenon in the past few years in the area,” said Louis Ho, principal sales director at Centaline Property Agency Ltd., whose patch includes Shouson Hill. “Owners may want to sell properties after seeing the valuations rise so much over time.”

The U.S. government purchased the property in 1948, records lodged with the Land Registry show.

While records don't stretch back that far, Hong Kong property prices have more than quadrupled since 2004, and the city has ranked as the world's least affordable housing market for the past decade.