With Hong Kong’s hotel sector in the doldrums, investors zero in on new-found favourite Singapore

Kimberley Hotel in Tsim Sha Tsui was sold for HK$4.3 billion, 28 per cent lower than the asking price of HK$6 billion, market observers said.

Hotel transactions in Singapore surged by 545 per cent quarter on quarter to S$2.8 billion in the three months to September

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Customers sit in restaurants at Quayside Isle in Sentosa Cove, Singapore. The city state’s hotel property market saw two major deals in the third quarter. Photo: Roy Issa

Published: 8:15am, 18 Oct 2019Updated: 8:15am, 18 Oct 2019

Prospective investors are hunting for bargains in Hong Kong’s hotel real estate market, which is experiencing a sharp downturn, as tourists stay away from the city amid unprecedented protests over the past four months.

Analysts say the focus is now firmly on Singapore’s hospitality sector that has seen a boom in transactions because of a strong outlook for tourism, unlike Hong Kong.

Peter Yuen, managing director and head of investment and sales at Savills, said deals were becoming increasingly difficult to close, as potential buyers were targeting discounts of between 20 to 30 per cent, but hotel owners were only willing to offer slight price cuts.

“Owners believe the market will recover once the social unrest is over,” said Yuen.

Kimberley Hotel was sold for HK$4.3 billion last month. Photo: SCMP

Transaction prices of hotel properties in Hong Kong have dropped 5 to 10 per cent from the level before mass street protests erupted in June, according to Reeves Yan, head of capital markets at CBRE Hong Kong.

Last month, the 546-room Kimberley Hotel in Tsim Sha Tsui was sold for HK$4.3 billion (US$548 million), Land Registry records show. Property consultants said the price was about 28 per cent lower than the owner’s original asking price of HK$6 billion.