Residential buildings stand in the Shouson Hill, center, and Deep Water Bay, right, areas of Hong Kong, China, (Photographer: Vivek Prakash/Bloomberg)

The US has sold its consulate staff compound in one of Hong Kong’s most exclusive neighborhoods for HK$2.57 billion ($332 million) to local developer Hang Lung Properties Ltd., amid escalating tensions between China and the U.S.

The price, announced Thursday by CBRE Group Inc. which handled the sale, was lower than the HK$3.1 billion to HK$3.5 billion valuation from Vincorn Consulting and Appraisal Ltd.

Hang Lung said it will invest about a further HK$4 billion to develop luxury detached houses on the site. “The price of this rare and premium land lot is reasonable, and the purchase is a vote of confidence in Hong Kong’s future,” the firm said in a statement.

The site in Shouson Hill, on the southern side of Hong Kong Island, comprises six low-density apartment buildings spread over almost 95,000 square feet (8,825 square meters), and offers ocean views over Deep Water Bay. The redevelopment should be completed by 2024, Hang Lung said.

A U.S. government representative said Wednesday the decision to sell the compound was part of its global reinvestment program and some of the proceeds from the transaction would be reinvested into multiple properties the U.S. owns in Hong Kong.

“It will not affect our presence, staffing or operations in any way,” the spokesperson said in a statement.

The sale comes at a sensitive time, with U.S. companies considering moving out of the city because of escalating political conflicts and disquiet over the national security law imposed by China. An American Chamber of Commerce in Hong Kong survey last month found about 40% of its 154 members were considering leaving the city.

Shouson Hill is one of the city’s most exclusive neighborhoods where some of the city’s richest tycoons, including Li Ka-Shing, own houses. The U.S. government purchased the property in 1948, records lodged with the Land Registry show.

An adjacent property was bought by Chinese developer China Resources Land Ltd. for HK$5.9 billion in 2018.

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