Signature Homes is the residential leasing arm of Sun Hung Kai Properties (SHKP), Hong Kong’s biggest developer by value. It manages more than 2,000 units.
“If you just go to any hotel, they are bound to have some long-staying guests,” Sun said. “Hotels tend to give out quite a significant discount for those 14-day stay packages.” Guests can also renew multiple times, he added.
SHKP’s leasing portfolio has units costing from about HK$20,000 (US$2,830) a month for a studio of 400 sq ft in Tseung Kwan O to about HK$500,000 for a 5,000 sq ft unit in The Peak or Island South.
By contrast, Regal Hongkong Hotel in Causeway Bay is offering a long-stay package of 30 nights in a standard room for only HK$14,900 until December 31, according to its website.
The government engaged some 26,000 hotel rooms – about 29 per cent of Hong Kong’s total inventory – up until September 26 when hotel quarantines were scrapped.
“Suddenly, they have no need of it,” he told the Post in an interview. “So the 26,000 rooms kind of flooded the market immediately.”
With no reopening of the border with mainland China in sight, 85 per cent of the previous mainland China market is non-existent, said William Cheng Kai-ming, chairman of Magnificent Hotel Investments.
The current 0+3 policy, which requires incoming visitors to monitor their health status for three days and take frequent tests, is deterring leisure visitors, while corporate and special event visitors contribute only a small amount of bookings, Cheng said. Staycation bookings have also diminished because locals are back to earmarking their travel budgets for overseas trips, he added.
“Even with the introduction of a ‘0+0’ policy, which is not expected any time soon, bookings or occupancies may only improve by 15 or 20 per cent, as that is how much the non-mainland Chinese market used to contribute,” Cheng said. “Unless the mainland Chinese border reopens completely, there are not going to be any meaningful bookings, and most hotels will be operating at heavy losses.”
Many may close down before year’s end, Cheng said.
Only the introduction of a 0+0 policy will bring short-term travellers to Hong Kong and fill the hotels, which would send long-stay guests back to serviced apartments, Sun said.
01:57
Inbound travellers to Hong Kong excited about end to hotel quarantine after 2 years
Inbound travellers to Hong Kong excited about end to hotel quarantine after 2 years
Signature Homes expects to add 1,000 more units, or 500,000 sq ft to its portfolio by the end of 2023, boosting the total to about 3 million sq ft, Sun said. These additions include a hotel, which he declined to name, that may be turned into serviced apartments and a new development in Cheung Sha Wan.
Another developer, CK Asset, early this month filed an application with the Town Planning Board to convert its Harbourview Horizon Suites in Hung Hom from a hotel to a mix of residential and hotel units.
Signature Homes has spent “hundreds of millions” since March 2021 on renovating flats at Dynasty Court in Mid-Levels. The first batch of 34 units has been fully leased.
Residential leasing landlords have seen the proportion of mainland and local tenants rise from 25 per cent in 2018 to 40 per cent now, with the rest being foreign tenants. They foresee that proportion staying as it is for a while.
For serviced apartments, the proportion of mainland and local tenants is about 30 per cent to 40 per cent. But local tenants make up half of the total at some properties.
Rents in Hong Kong have dropped by 5 to 10 per cent since 2018 amid the 2019 social unrest and Covid-19, Sun said.
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