January 28, 2023

American Chamber of Commerce in Hong Kong, operating at a deficit for past four years, sells pricey office space in Central: source

The American Chamber of Commerce in Hong Kong has called a 6,000 sq ft office in Central’s Bank of America tower home since 1996. Photo: Shutterstock

The American Chamber of Commerce in Hong Kong (AmCham) has said goodbye to its grade A office space in Central, selling the property after suffering through four years of deficits totalling more than HK$5.6 million (US$723,000), the Post has learned.

The influential business group sold the 6,000 sq ft office at Bank of America Tower – bought in 1996 for more than HK$54 million – earlier this month, an insider said. The selling price was not immediately known.

The move follows AmCham, which operates as a non-governmental organisation, posting losses of more than HK$680,000 in 2016, HK$660,000 in 2017 and HK$1.57 million in 2018, according to financial reports seen by the Post.

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In a statement on Friday, Robert Grieves, the group’s chairman, would not confirm or deny if the chamber had sold the space, and only said it would seek a new modern office and looked “forward to a bright future in Hong Kong”.

“We are also committed to staying in Hong Kong as we look to the future,” he said. “AmCham will

eventually seek a new modern office space that is digitally friendly and comfortable for both our members and visitors.”

© Provided by South China Morning Post
AmCham staff members raised concerns about president Tara Joseph’s HK$300,000 bonus in May. Photo: May Tse

AmCham has yet to release its 2019 audit to members despite it being due in March, a delay of more than six months.

However, in a staff email to its board of governors in May, a copy of which was seen by the Post, the deficit for 2019 was said to have reached a record high of HK$2.7 million.

“AmCham has become cash-strapped and has difficulties paying the staff’s salaries. Later, it started to consider selling its office site to generate a cash flow,” the source said.

In the May email, all 15 employees at the time raised concerns about AmCham’s financial well-being after it downsized its staff from 26 to 15 between February 2017 and January 2020.

It feels strange that AmCham sold its property at this period of time, as sale prices of grade-A offices in Central have dropped by 15 per cent compared with last year

Pang Shiu-kee, managing director of SK Pang Surveyors

They also pointed to the fact that the chamber had sought a bank loan of more than HK$4.5 million in 2018 to renovate the office, the same year the mortgage was fully paid up, questioning why it was mulling selling the office just a year after completing renovations.

“However, the chamber had not seemed to strategically or financially benefit from this move, as a decision to consider selling or leasing the entire office came just one year after the completion of renovation,” the email said. “For this renovation, AmCham now has a debt burden of half a million a year for 10 years.”

The Post has contacted the organisation for comment.

Pang Shiu-kee, managing director of SK Pang Surveyors, estimated AmCham should have been able to fetch over HK$160 million for the site, at about HK$27,000 per sq ft.

Former AmCham directors allege they were sacked after questioning president Tara Joseph’s pay package

“It feels strange that AmCham sold its property at this period of time, as sale prices of grade A offices in Central have dropped by 15 per cent compared with last year due to the lack of buyers amid the Covid-19 pandemic and the US-China tensions. AmCham should have waited until the market prices went back up,” he said.

In May, AmCham president Tara Joseph, who took the helm in February 2017 after more than two decades as journalist, sacked three senior employees after they, together with the rest of the staff, raised concerns in the May email over the approval of Joseph’s HK$300,000 bonus in February.

The source said its membership numbers had fallen from a peak of roughly 2,800 in 1996 to fewer than 1,300, with members typically paying a membership fee of more than HK$10,000 per year. The chamber also recently stopped publication of its magazine after 50 years due to financial difficulties.

An AmCham member, who spoke on condition of anonymity, said the chamber should update members about its financial challenges.

“Honestly, as a member, I’d want to know more about the financials before we comment. I definitely haven’t heard the rumour regarding selling their space! I think it’s fair to say that if these challenges exist, AmCham should update members,” the member said.

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This article originally appeared on the South China Morning Post (www.scmp.com), the leading news media reporting on China and Asia.

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