New World Seeks to Swap Office Floors for Hotel in Tsim Sha Tsui Project

As it struggles to refinance around $11 billion in debt amidst a declining property market, Hong Kong giant New World Development is reimagining a 28-storey commercial project in the heart of the city’s Tsim Sha Tsui tourist area.

After receiving approval more than a year ago to build a combined office, retail and residential tower near Kowloon Park, New World has lodged an application with the Town Planning Board to rework the eight office floors planned for the development at 43-49A Hankow Road into a 99-room hotel.

The move comes as Hong Kong office rents have fallen more than 42 percent from their 2019 peak, with some developers now betting on a recovery in the city’s downtrodden hospitality market.

“Through the pandemic, owners have learned to appreciate hotels in that they can provide upside where office pricing is much slower to react. With streamlined facilities, this property should be able to operate at compelling profitability, with GOP (gross operating profit) likely above 40 percent, particularly if New World decides to cluster certain roles with some of their other properties,” said Dan Voellm, chief executive and founder of hotel consultancy AP Hospitality Advisors.

Tourism Numbers Rising

New World is redesigning its project between the Nathan Road shopping strip and Wharf’s Harbour City commercial complex after having secured regulatory approval last January to develop 138,786 square feet (12,894 square metres) of gross floor area on the site with 39 percent of that space dedicated to office. 

On the lower floors, 32 percent of the total space was marked for retail with 110 residential units accounting for another 29 percent of the area.

The new plan for the site proposes a 27 storey building spanning 138,790 square feet of gross floor area with hotel rooms taking up the former office segment from the eighth to 17th floors (with floors 13 and 14 left out to ensure good fortune). 

The company is making the proposal after Hong Kong hotels averaged over 87 percent occupancy in the first four months of 2025, up from 84.75 percent a year earlier, according to figures from the city’s Tourism Board.

Provisional data released by the Tourism Board this week showed a 20 percent year-on-year increase in visitor arrivals in the city in May, although per-capita spending remains far below pre-pandemic levels.

“In a strong location at the heart of Tsim Sha Tsui, the hotel will fare well in occupancy, benefitting from market compression. At a total GFA of around 55,000 square feet, the standard room size would not be too large, yet competitive in the local submarket context,” Voellm said.

While cutting the number of floors by one New World is also reducing the total number of residential units by 15 while enlarging the average size of each home. The ground through seventh floors are earmarked for retail space.

New World, which said in the application that it expects to complete the project by 2029, had not responded to Mingtiandi inquiries by the time of publication.

Commercial Downsized

Located about a three-minute walk from the Tsim Sha Tsui MTR station, 43-49A Hankow Road is surrounded by restaurants, hotels and shopping malls including Wharf Real Estate Investment Company’s gigantic Harbour City luxury mall.

New World, which took full possession of the Hankow Road site in March 2023, had originally planned an entirely commercial project on the site before splitting the space between retail, office and residential in the plan approved last year. 

The company has other large developments in the Tsim Sha Tsui area, including the 3-million-square-foot Victoria Dockside at 18 Salisbury Road and The Masterpiece at 18 Hanoi Road.

In January Henderson Land Development proposed to sell an office and retail development project at 16-20 Kimberley Road to its Miramar Hotel and Investment unit, with Miramar saying in a stock market filing that it planned to build a 99-room hotel on the site a few minutes’ walk from New World’s Hankow Road project.

That proposal was rejected by Miramar shareholders in March.

Wooing Back Big-Spenders

Visitor arrivals in Hong Kong rose 20 percent year-on-year in May to reach 4.08 million thanks to China’s Labour Day golden week holiday and a range of events including concerts, meetings and and exhibitions. That figure, however, still lagged behind May 2019 levels, when nearly six million people travelled to the city.

The volume of high-end visitors has declined significantly with the mainland visitors that account for more than three-quarters of the city’s visitors now more budget-minded due to the economic slowdown.

“The lower willingness to spend [of mainland visitors] has resulted in Special Forces Tourism, which often eschew any form of accommodation in town whereby most of them are staying in nearby Shenzhen for a lower price,” said Voellm.

To win back big-spending tourists, the city is seeking to brand itself as Asia’s events capital, emphasizing concerts and trade shows over shopping. The government is also striving to make Hong Kong a Muslim-friendly city to attract high-paying visitors from the Middle East.