Hong Kong’s total hotel investment volume in 2024 revealed

Five key transactions during the year were worth nearly HKD 2 billion.

According to a Colliers report, Hong Kong had 5 notable hotel transactions in 2024, with investment volume at HKD 1.988 billion, down 60% from 2023.

“The number of deals was up from 3 the previous year. 547 keys transacted across a gross floor area of 200,116 sq. ft. at an average price of HKD 3.63 million per key and HKD 9,934 per square foot,” the report added.

Here’s more from Colliers:

Most acquisitions were for mid-scale hotels for conversion to student accommodation. Buyers included Crystal Group, Hong Kong Metropolitan University, PGIM and Shin Wing Ching.

Transactions were primarily driven by ‘stressed’ assets and/or strategic buyers and end-users. For example, Hong Kong Metropolitan University acquired the newly-built 255-key Urbanwood Hotel in Hung Hom for conversion to MU88 offering 400+ beds to cater to their students.

Wider hotel investment volume was hindered by elevated (yet lower) interest rates, market uncertainty and limited access to bank financing. Private credit funds looked to fill the void left by traditional lenders.

Higher borrowing costs, pressure on room rates and an increase in operational expenses impacted margins and cash flow, making it harder for investors to underwrite deals. Certain full-service hotels were marketed with limited success due to the larger ticket size and high price. Some of these may transact in 2025 as sellers adjust pricing expectations.

The serviced apartment sector witnessed some deal flow, including the sales of the 57-unit ‘The Unit Davis’ in Kennedy town for close to the HKD 275 million valuation and the 18-unit 100-102 Queens Road East in Wan Chai for HKD 160 million.

Hotel investment activity in 2025 will focus on stressed situations by strategic buyers for conversion to student accommodation and for rarely traded hotels and serviced apartments, emphasising Hong Kong’s longer-term attractiveness as a premier travel destination and a leading education and talent hub.