Based in Beijing, Li-Ning announced plans to acquire a 25-story mixed office and retail building in Hong Kong for $2.2 billion (US$282 million) to house its headquarters.
Harbor East in North Point includes two floors of retail space with tenants including Five Guys, Frites, Pacific Coffee, and Subway. The total land area ranges from about 9,600 square feet, with a gross floor plan of approximately 144,000 square feet.
“The purchase of the property for use as Hong Kong headquarters of the group via the acquisition demonstrates the group’s confidence in its business prospects in Hong Kong and marks the implementation of its plan to strengthen its business development internationally,” China’s biggest sportswear manufacturer said in a filing with the Hong Kong exchange late on December 10.
The property purchase comes at a challenging time in one of the world’s priciest property markets, particularly the office segment, facing record-high vacancy rates.
Shares of Li-Ning were down 14 percent on December 11 on the Stock Exchange of Hong Kong with Bloomberg reporting “some analysts saying the move was not the best use of capital.”
On December 12, Li-Ning announced plans to stock repurchase program for up to 263.6 million, or about 10 percent, of its shares. Li-Ning proposes to use up to HK$3 billion in funds to repurchase shares under the share repurchase plan.
Li-Ning stated, “While the Board has full confidence in the business prospects and long-term growth of the group, it considers that the current share price of the company is below its intrinsic actual value.”
Li-Ning’s shares are down nearly three-quarters this year as recent third-quarter results missed expectations, with better performance by local rival Anta Sports Products and Nike showing signs of recovery in the region.
