Winland Group’s Lun Family Selling Hong Kong Hotel to Airport Authority for $98M

A firm controlled by the Lun family behind real estate investor Winland Group has agreed to sell an 800-room hotel to Hong Kong’s airport authority for HK$765 million ($98.2 million), as acquisitions by governmental bodies and non-profits continue to sustain the city’s struggling property market.

HKEX-listed Mexan Ltd, chaired by majority shareholder Edwin Lun, is disposing of the Winland 800 Hotel in Tsing Yi at more than twice the asset’s book value of HK$352.1 million, according to a stock filing. The Airport Authority Hong Kong approached the company last May to express an interest in acquiring the hotel, according to the statement, with the asset having generated pretax losses in the financial years ended 31 March 2023 and 31 March 2024 of HK$17 million and HK$10.7 million.

Lun said the economic downturn cycle in Hong Kong had hurt Mexan, which exists chiefly as the owner-operator of the Winland 800.

“The group’s performance in this sector is dependent on the incoming of travellers, especially those coming from mainland China,” the chairman said in the filing. “The rise of day trippers and prudent spending pattern pose challenges to the hotel industry.”

A spokesperson for the airport authority told Mingtiandi that the statutory body is in the process of acquiring suitable properties, mainly for the accommodation of students from Hong Kong International Aviation Academy and other aviation training purposes, and that details would be announced in due course.

Rising Occupier Deals

The Winland 800 sale, which works out to HK$956,250 ($122,763) per room, was brokered by Knight Frank’s capital market team, with CBRE understood to have advised on the deal. The accommodation for the aviation academy, which trains pilots, air traffic controllers and other airport personnel, would mark the latest in a string of bargain properties picked up by non-traditional property players for their own use.

Last month, local investor Francis Law completed the HK$880 million sale of a Kowloon retail podium to City University of Hong Kong, with the property at 94 Granville Road changing hands at a 67 percent discount to its pre-pandemic guide price.

CityU’s buy came on the heels of Hong Kong Metropolitan University completing its purchase of the former Cheung Kei Center for HK$2.65 billion. Mingtiandi reported in November that HKMU had agreed to buy One HarbourGate, the Kowloon office building that once served as the Hong Kong headquarters of defaulted mainland property firm Cheung Kei Group, after the asset lost nearly two-thirds of its value over the past two years.

HKMU, which has been seeking additional campus space, last June said it had bought the Urbanwood Hung Hom hotel, located a 16-minute walk from One HarbourGate, for use as student housing.

In late 2023, the landmark Sunbeam Theatre in North Point sold for a reported HK$1 billion, with the buyer believed to be a church likely to use the property for its operations.

Winland Windfall

Mexan plans to use the proceeds from the Winland 800 disposal to buy the Grand View Garden mall and carpark in Kowloon from a vehicle controlled by Edwin Lun for a consideration of HK$364.4 million.

A special dividend of HK$0.06 per share is planned upon completion of the Winland 800 sale, with Lun set to reap HK$162 million in dividends based on his 69.06 percent stake in Mexan, boosting his total earnings on the transactions to more than HK$526 million.

Winland Group is also seeking a buyer for Winland House, a 84,510 square foot (7,851 square metre) commercial building in Cheung Sha Wan, at a guide price of HK$700 million. Sole marketing agent Savills is highlighting the building’s potential as a student housing conversion.