100-102 Queen’s Road East (Image: Google Maps)
Hong Kong property investor Lai Wing-To has sold a serviced apartment block in the city’s Wan Chai area, as the “Ten Billion Shop King” continues to sell down his property portfolio amid plunging commercial real estate valuations in the Asian financial centre.
Lai, who earned his fortune and moniker through street shop and retail investments over the last three decades, has sold the eight-storey building at 100-102 Queen’s Road East for HK$160 million ($21 million), with market sources pointing to a vehicle backed by investors including a member of the Kuok family behind HKEX-listed developer Kerry Properties as the buyer.
CBRE, which advised on the transaction and described the buyer as a “private investor”, described the asset as capable of providing long-term stable income and capital appreciation.
“This investment is expected to yield long-term stable income for the buyer and significant appreciation in the long run,” CBRE’s Hong Kong capital markets team said in a LinkedIn post on Friday.
Portfolio Losses
Situated a four-minute walk from the Wan Chai MTR station near the junction of Queen’s Road East and Lun Fat Street, the building has a total floor area of 12,929 square feet (1,201 square metres), with 18 serviced residence units on the upper five levels and shops on the lower three floors. The transaction price works out to HK12,375 per square foot.
Lai Wing-to has extended his streak of property sales (Getty Images)
Lai reportedly purchased the building formerly known as Kui Chi Mansion in 2007 from Hong Kong movie star Stephen Chow for HK$64 million before converting the property into serviced apartments. In 2021, the building came under the management of local serviced apartment and co-working operator Owl Square Group which operated the building as Owl Square Residence @ 100 QRE.
The property features studio and one-bedroom units ranging from 300 to 500 square feet, with the asset generating total monthly rental income of around HK$615,000, according to local media reports.
Lai, who began investing in Hong Kong retail properties in 1991, eventually assembling a property portfolio estimated at one point to be worth HK$15 billion, told local media last year that the market value of his property holdings had fallen by about 30 percent from its peak, due to the pandemic.
In August, Lai began selling down his London properties, including selling a commercial building at 147-155 Wardour Street to Singapore-based fund manager HECapital for around £35 million and offloading an office and retail building at 291 Oxford Street & 2 Harewood Place to JP Morgan for £71.4 million. Lai was also reported earlier this year to be seeking a buyer for Standbrook House at 2-5 Old Bond Street.
Back home, Lai has been marketing a pair of commercial assets in Causeway Bay and Central together worth an estimated HK$600 million, and put his mansion at 10A-10C Tai Tam Road in Hong Kong’s Southern district up for sale last October.
Plunging Valuations
100-102 Queen’s Road East is the latest Hong Kong rental residential asset to go on the block at a cut rate price.
Earlier this month, Emperor Entertainment Hotel, the HKEX-listed hospitality arm of Hong Kong-based conglomerate Emperor Group, agreed to sell The Unit Davis in Kennedy Town to a local investor for an agreed property value of HK$275 million, after the asset’s value fell by nearly half in two years.
That deal was announced days after Colliers began marketing a pair of serviced apartments owned by local living operator Chi Residences, including the 107-unit Chi 138 in Wan Chai and the 59-unit Chi 314 in Jordan.
Last month, Schroders launched a fresh marketing campaign for The Nate, with the UK investment manager offering the combined residential and retail block in Tsim Sha Tsui at a third off of its HK$600 million purchase price eight years ago.
In September, local real estate fund manager Crystal Investment acquired the 25-storey Incredible Residences in Kowloon for HK$123 million after the asset had been put up for sale by receivers in March 2023.
Earlier this year, PGIM Real Estate teamed up with co-living provider Dash Living to buy The Ovolo Sheung Wan hotel from Hong Kong-based boutique hotel and serviced apartment provider Ovolo Group for HK$320 million.
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