CK Asset to convert some hotels into residential units to make most of decline in hospitality sector, rise in home prices

There is value in converting some of the company’s hotels into residential units, chairman Victor Li Tzar-kuoi says

Because of Covid-19, operating hotels has become riskier than ever before: analyst

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Harbour Plaza Resort City in Tin Shui Wai could generate a residential area of 139,500 square metres, or 5,000 units. Photo: KY Cheng

Published: 6:50pm, 6 Aug 2021Updated: 6:53pm, 6 Aug 2021

CK Asset Holdings will convert some of its hotels for residential use amid a decline in the hospitality sector thanks to the Covid-19 pandemic and a record rise in the city’s home prices.

Victor Li Tzar-kuoi, the company’s chairman and managing director, stated publicly for the first time on Thursday that a specific percentage of CK Asset’s hotels portfolio will be converted for housing in the world’s most unaffordable housing market.

“We have a huge hotels portfolio. [For] 10, 15 per cent of that portfolio, the neighbourhood has changed, pricing has changed. And there is value generation by converting some of [these hotels] to residential,” he said.

Harbour Plaza Resort City in Tin Shui Wai could generate a residential area of 139,500 square metres, or 5,000 units, according to a document released by the Town Planning Board in December last year. Horizon Suites in Ma On Shan could generate up to 758 flats, with a residential area of 44,863 square metres, according to another document released in February this year. The two hotels have a total of 1,933 rooms currently, or about 13 per cent of the about 15,000 hotel rooms and serviced suites CK Asset owns.

Li’s comments come at a time when hotels in Hong Kong have struggled to fill rooms and break even, especially on weekdays, after the protests of 2019 and the coronavirus pandemic, which broke out last year, dragged the city’s visitor arrivals to almost zero. But home prices have proved far more resilient, with local demand and quantitative easing contributing to a recent rally.

Victor Li Tzar-kuoi, CK Asset Holdings’ chairman and managing director. Photo: Handout

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