US real estate private equity firm AEW has reportedly sold a 14-storey boutique serviced apartment building in Hong Kong’s Central district for HK$240 million ($30.66 million), that it had held for just three years, according to a person with knowledge of the deal.
AEW, which bought the former Mood Hotel for around HK$220 million in 2015, put the Aveny serviced apartment building up for sale last year at a reported asking price of HK$280 million but is said to have reduced that expectation by HK$40 million as Hong Kong’s market slowed in the second half of this year, the person said.
Local Investor Buys to Hold
According to Antonio Wu, deputy managing director of Capital Markets and Investment Services for Colliers, the buyer was a local individual investor who intends to hold the property as a long-term investment.
Wu, who represented AEW in the disposal, would not confirm the HK$240 million sale price cited by Mingtiandi’s source, although he did indicate that the transaction price did not reach the HK$250 million level cited in some local media reports. AEW declined to comment on the reported deal.
The building, at 31 Wyndham Street, also has a restaurant on the ground floor and stands in the middle of Hong Kong’s entertainment district, close to nightlife areas Lan Kwai Fong and SoHo and just a 10-minute walk to Central’s prime business district.
Buy, Refit, Sell in Central
AEW had refitted the 8,916 square foot (828 square metre) building, which has a footprint of 810 square feet, into 11 apartments, each occupying its own floor. The units cater mostly to working financial professionals. According to the Aveny’s official website, the apartments on offer range from 57.14 square metres to 67.82 square metres and cost from HK$32,000 to HK$43,000 monthly.
With various add-on services, like daily housekeeping, daily linen changes, and free wireless broadband internet service, the average unit rental of HK$52 per square foot is 30 percent higher than the average residential rental of HK$40 per square foot per month in the surrounding area.