A top American business school is set to relocate its Singapore campus to Hong Kong next year after the government offered it a 17,000 sq ft heritage building on Mount Davis for a one-off premium of just HK$1,000.

The grade-three historic building has been set aside by the government on a 10-year renewable lease for the University of Chicago Booth School of Business, pending clearance from town planning and other bodies.

The former detention centre - initially a clubhouse for British soldiers before being used to incarcerate political prisoners - will host the school's executive MBA programme. It is not expecting to move in until 2016, but the course, which costs students HK$1.2 million each, is due to start in the city next June at an as-yet undetermined location, William Kooser, associate dean of the programme, said yesterday.

A key reason behind the move is Hong Kong's proximity to the mainland and other important markets in the region. "We are looking for greater presence in North Asia. Hong Kong's proximity to [the mainland], the world's second-largest economy, is particularly attractive," said Kooser.

Reports Shirley Zhao and Bryan Harris for South China Morning Post.