Pure Fitness faces HK$13.5 mn claim from Champion REIT

CP(SH) Limited, a subsidiary of the real estate investment trust, Champion REIT (02778. HK), has filed a writ in the High Court against Pure Fitness (Central) for breach of a tenancy agreement, seeking an order for repayment of over HK$13,586,000 with interest and compensation for the breach of the tenancy agreement.

The defendants are Pure Fitness (Admiralty), Pure International and Pure Fitness (Central). Accordingly, CP(SH) Limited entered into an 11-year tenancy agreement with the 1st Defendant in June 2015 for the lease of the 2nd to 4th floors of Industrial and Commercial Bank of China Tower and a portion of the 3rd floor of Champion Tower in Central, Hong Kong for a term expiring on 31 December 2026. The 2nd and 3rd Defendants were the guarantors of the tenancy agreements.

The plaintiff alleged that Pure had failed to pay the rent for the months of April to May this year, and had also defaulted on the payment of miscellaneous fees such as management fees, rates and new members' levy for the months of June to August, amounting to a total of HK$12,683,000, which together with interest of about HK$903,000 involved a total of HK$13,586,000 in the lease.

The tenancy agreements provide for monthly rents of HK$1,822,000 for the period from January 2016 to November 2021, HK$1,830,000 for the period from November 2021 to October 2023, HK$2,130,000 for the period from November 2023, HK$1,388,000 for the period from December 2023 to December 2024, and HK$1,540,000 for the period from January 2025 to December 2025, and the monthly rent from January 2026 to December 2026 is HK$1,690,000 plus a monthly management fee of HK$535,000 per month.

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