Over 4,800 hotel units to be converted into homes
The TPB has received at least seven planning applications since 2020.
The Town Planning Board (TPB) has received at least seven applications for the conversion of around 4,800 flats to residential use, Knight Frank reported.
Hotel owners scaled down their business in response to the impact of the pandemic to the hospitality sector.
Amongst the application include CK Asset’s Harbourview Horizon Hotel, Horizon Suite Hotel, and Harbour Plaza Resort City accounting for at least 3,300 units.
“Hotel rates follow seasonal trends, while domestic housing has a far more stable and upward growth trend,” the report read in part.
“Hotel investors and operators who prefer lower volatility cash flow, while still enjoying the upside of seasonal uptrends may opt for partial conversion to long-stay or co-living space.”
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According to Knight Frank, there has also been an increase in the investment activity for hotels as it attracts interest for conversion into co-living or long-stay accommodation.
“It is attracting interest from value-add investors interested in converting these premises into co-living or long-stay accommodation,” the report also read.
“Many of these investors are offshore funds, some of which have had limited investment exposure to Hong Kong.”
A total of 17 hotel transactions have been recorded since 2020, totalling HK$12.7b billion. At least eight of them involve plans or have confirmed conversion into alternative uses, such as co-living or student accommodation, totalled HK$9.3b.