Henderson Land Development has agreed to sell a 598-guestroom hotel in Kwun Tong, Kowloon, Hong Kong, for HK$2.3 billion, or HK$3.8 million per room. In U.S. dollars, that's almost $300 million.
The 10-year-old Newton Place Hotel is one of four Newton hotels owned by Henderson. The company is looking to dispose of non-core assets and acquire new properties.
Last September, Henderson sold its Golden Centre office building in Sheung Wan to an undisclosed buyer for HK$4.4 billion.
In May, we took a look at Hong Kong's visitor numbers, and how the city's hotels were adjusting. In 2015, the number of global visitors to Hong Kong reached 59.3 million—a decline of 2.5 percent from 2014. In the first quarter of 2016, the decline worsened, with arrivals dropping more than 10 percent year-over-year.
William Cheng Kai-man, chairman of Magnificent Estates, a midscale hotel, said that the decrease of demand is discouraging owners from converting industrial properties to hotels—as are logistical issues. (Giving every room in a former factory a window poses a challenge, he said.) New-build hotels, on the other hand, can be designed to order, maximizing both square footage and revenue.
At the time, we estimated that Hong Kong was likely to have an estimated 274 hotels with about 76,950 rooms by the end of 2016. (The final numbers have not yet been released.) By the end of 2017, it will have 292 hotels with about 81,365 rooms.