Hong Kong’s Hon Kwok Land Sells Tsim Sha Tsui Hotel as Japan Portfolio Grows

With Hong Kong commercial property values continuing to slide and visitor numbers running far below pre-pandemic levels, developer Hon Kwok Land has agreed to sell one of its two hotels in the Asian financial hub.

Having fallen to a HK$675 million ($89 million) loss in the 12 months ended 31 March, from a HK$5 million profit a year earlier, the developer led by James Sing Wai Wong said last week that it has agreed to sell the Bauhinia Hotel in Tsim Sha Tsui for HK$338 million.

In a statement to the Hong Kong exchange, Hon Kwok said, “The Group aims at rationalizing the property portfolio and resource allocations to prepare for the next phase of growth.” The company also noted that, “The Disposal will also enable the Group to reduce its bank borrowings, improve its liquidity and strengthen the overall financial position for the Group.”

While Hon Kwok has traditionally focused on Hong Kong and mainland China, the company more recently has turned its attention to opportunities in Japan, adding its  ninth hotel in that country through a February acquisition. 

Visitor Levels Lag

Hon Kwok sold the 98-key hotel at 5, 7 and 9 Observatory Court, along with the operating license, to a private company controlled by Wong Man Li, founder of Hong Kong furniture maker Man Wah Holdings, according to the filing. The property suffered a loss of HK$33 million in its most recent financial year. 

Total consideration for the transaction is HK$340.35 million, which includes HK$338 million for the property, along with HK$2.35 million for the operating company. Hon Kwok Land had purchased the site in December 2002 for HK$55 million, according to Land Registry records. 

Situated in the heart of the Tsim Sha Tsui shopping district and within a 10 minute walk of both the Jordan and Tsim Sha Tsui MTR stations, the Bauhinia hotel has  14,000 square feet of retail space on its lower floors and 47,000 square feet of hotel area.

Hon Kwok Land is parting with the 23-storey building as falling visitor numbers continue to put downward pressure on the local hospitality market. Hong Kong welcomed 36 million visitors in the first nine months of 2025 and is on track to achieve 50 million for the full year, according to government statistics.  While that number is well above the 2024 total, it fall well short of the 65 million arrivals in 2018. 

Current rates at the hotel start from about HK$1,100 per night with analysts pointing to its proximity to Hong Kong Polytechnic University as providing potential value for student housing investors. 

The deal was reached with a 3.7 percent discount from the property’s HK$351 million valuation as of the end of March.

Hon Kwok Land’s HK$338 million sale price for the hotel translates to the equivalent of HK$3.22 million per key, adjusting for the value of  the property’s retail element in one of Hong Kong’s most sought after shopping locations, according to CHFT Advisory and Appraisal.

“Despite a slight drop from the March valuation, the transaction price of the Bauhinia Hotel still looks quite good,” said Bobby Mak, real estate valuer at CHFT. By comparison, the Hotel Ease Mong Kok in Yau Ma Tei changed hands at HK$2.19 million per room in late July.

The buyer Wong Man Li is an unrelated third party to Hon Kwok Land, according to the developer’s statement. Wong, 60, and his wife Hui Wai Hing, 61, ranked 320th on the Hurun China Rich List for 2025 with a net worth of RMB 19.5 billion ($2.7 billion).

Diversifying Beyond China

While Hon Kwok Land also owns a Bauhinia Hotel in Sheung Wan, the company has been devoting additional resources to opportunities outside of Greater China. 

In February Hon Kwok said that at a joint venture 51 percent owned by the company had spent JPY 1.2 billion ($7.8 million) to acquire a 10-storey hotel at 119-6 Hidenincho in Osaka’s Tennoji Ward.

In its most recent annual report, Hon Kwok noted that, “We remain strongly positive to the growth in the number of tourists going to Japan, especially key cities like Tokyo and Osaka where we have properties.”

In addition to the Tennoji Ward investment, Hon Kwok has four other hotel properties in Osaka.