HONG KONG, Dec 30 (Reuters) - The sale of property owned by
the U.S. consulate in Hong Kong failed to be completed as
scheduled on Wednesday after China unexpectedly stepped in and
said its approval is needed, the buyer said, amid wide-ranging
Hong Kong developer Hang Lung Properties said in a
regulatory filing that it was unable to complete the purchase of
the residential property, the latest twist in the $331.5 million
deal in an upscale location in the financial hub.
Chinese foreign ministry spokesman Wang Wenbin later told a
daily news briefing in Beijing that the application requirement
was "in light of U.S. regulations on the management of
registered properties of foreign missions in the United States
and based on the principle of reciprocity."
"Only when they get the approval in writing can they
proceed," Wang said.
Hang Lung, which agreed in September to buy the property
used to house U.S. consulate staff, said in its filing on
Wednesday that it had received a letter from Hong Kong's Land
Registry last week saying that the property is "not an ordinary
real estate property."
According to the letter, Beijing advised the Hong Kong
government that if the U.S. Consulate General intends to rent,
purchase or sell any real estate in Hong Kong, the U.S.
government must make a written application to China at least 60
days before the deal, and the deal shall not proceed without the
written consent of the Chinese government.
"The matters as stated in the letter were exceptional and
were not made known to or anticipated by (Hang Lung)," the
Hang Lung said that after informing the United States, the
U.S. on Tuesday contested the necessity to comply with the
Hang Lung is evaluating and taking legal advice on possible
actions, including exploring the feasibility of extending the
time for deal completion.
A U.S. consulate spokesperson told Reuters that more time is
needed for the buyer and seller to complete the processes needed
for closing on the property.
During the tender of the property, industry consultants said
many developers in mainland China and Hong Kong were hesitant to
venture an offer because it was seen as politically sensitive.
The former British colony returned to Chinese rule in 1997.
In July, the United States ousted China from its Houston
consulate, prompting China to seize the premises of the U.S.
consulate in Chengdu in retaliation.
(Reporting by Clare Jim; Additional reporting by Yew Lun Tian
in Beijing; Editing by Kim Coghill and Tony Munroe)