Hong Kong Shop King’s Family Buys Wan Chai Hotel for $58M

Tang Shing-bor, known for his sprawling portfolio of retail shops, is continuing his drive to become one of Hong Kong’s leading hoteliers by purchasing the Hotel Bonaparte in Wan Chai for HK$450 million ($57.5 million).

Stan Group, a property company run by Stan Tang, the youngest son of the billionaire property investor, acquired the 80-room hotel for an average price of about HK$5.62 million ($718,197) per room, bringing his hotel and serviced residence portfolio to a total of 17 assets.

The Tangs acquired the property from Rhombus Group, a Hong Kong-based hotel operator, at a time when many competitors are converting their hotels into office properties amid slumping tourist arrivals and low yields for the asset class.

Hong Kong Investor Bets on a Boutique Hotel

According to an account in the Hong Kong Economic Times, the seller offered the 1998-vintage building for HK$500 million through a public tender process that attracted multiple bids. A marketing document identifies the seller as Rhombus Group.

The 24,278 square foot (2,255 square metre) property, which Rhombus describes as a “micro boutique hotel” on its corporate website, is located at 11 Morrison Hill Road, between the Wan Chai and Causeway Bay MTR stations and a few blocks west of prime shopping destination Times Square Hong Kong. The 23-storey building includes a ground-floor shop leased out to cafe chain Pacific Coffee through June 2018.

The hotel was opened in 2008, after conversion of the building, and renovated in 2011. Hotel Bonaparte is reported to average 98 percent occupancy, with an average room rate of HK$400 ($51) to HK$1,200 ($153), and earns a monthly income of HK$1.3 million ($166,131). The acquisition of the 24,278 square foot (2,256 square metre) hotel generated an estimated investment yield of 3.5 percent.

Following the sale, Rhombus now operates two hotels in Hong Kong and one in Chengdu, China. The brand shuttered its Hotel LKF in Hong Kong’s Lan Kwai Fong nightlife district in July for conversion into an office building, where WeWork is leasing space for a new co-working centre.

“Shop King” Acquires a Taste for Hospitality

Stan Group has spent HK$10 billion ($1.3 billion) this year alone to add 14 hotels and two new apartment projects to its portfolio as Tang strives to become one of Hong Kong’s top five hoteliers, according to a report in the South China Morning Post earlier this month. Five of Tang’s new hotels are slated to open this year.

Tang’s holdings now include 4,000 hotel rooms and serviced apartments. The family owned hospitality properties are managed by Tang’s Living Group, a company run by the magnate’s son Stan Tang, which the elder Tang plans to eventually take public.

Tang’s collection of hotels, which are mainly located in the outlying districts of Tin Shui Wai, Ting Kau, Kwai Chung and Kwun Tong, are targetted at local clientele and visitors from mainland China and southeast Asia.

Tang bought the 37-room A3 Hotel in Yau Ma Tei in August of last year for about HK$108 million ($13.9 million), according to a local media report. The 83-year-old real estate magnate is also raising his profile in the residential market. Last month Tang purchased the Tplus development in Tuen Mun for HK$1.2 billion ($153 million), a residential project that will offer the city’s tiniest flats at 128 square feet (12 square meters) upon completion next year.

“Uncle Bor,” as he is sometimes called, has a net worth of around $1 billion, making him the 50th richest person in Hong Kong according to a Forbes magazine ranking.