Just over a year after Kailong Real Estate Investment sold off a former hotel that it had converted into a co-working centre in Shanghai, the Warburg Pincus-backed firm is said to have bought the Kings Hotel in Hong Kong’s Wanchai for around about HK$1.35 billion ($173 million), with plans to renovate the 193-room property into a commercial building.
A Kailong fund has purchased the 86,000 square foot (7,990 square metre) building from billionaire property investor Tang Shing-bor, according to an account in the Hong Kong Economic Times. The selling price equates to HK$15,600 ($1,997) per square foot for the three-star hotel at 297-305 Jaffe Road.
Kailong May Turn Another Hotel into a Co-Working Hub
The news follows a report last month that an unnamed group was bidding HK$1.4 billion ($181 million) to purchase the asset en bloc, with intentions to convert the hotel into a co-working centre – the latest in a series of properties to be repurposed as flexible offices in Hong Kong.
With its reported purchase of Kings Hotel, Hong Kong-managed, Shanghai-based Kailong may be looking to replicate the success of an earlier conversion project on the mainland. Kailong acquired the former Laurel Hotel, a run-down, three-star hotel in Shanghai in March 2015 through its vehicle the KaiLong Greater China Real Estate Fund.
The company then refurbished the 12-storey building near People’s Square, repositioned it as a chic office tower called The Konnect, and succeeded in leasing 10,000 square feet of space to co-working giant WeWork. Last November, Kailong doubled its equity investment in the property by flipping the 11,000 square foot building for a sum in excess of RMB 500 million ($74 million).
Hong Kong Buildings Get Flexible
The seller of Kings Hotel, best known as a retail property tycoon, has also been cashing in on the co-working trend in Hong Kong. In July, Tang sold the Wave in Kowloon East’s Kwun Tong area to Bank of China (Hong Kong) Asset Management, after converting the 11-storey former industrial workshop into an event and co-working centre.
Hotel LKF in the Lan Kwai Fong nightlife district closed its doors in the same month for renovation into a co-working facility, with WeWork said to be leasing out the nine-story building. Also joining the flexible office fray is Spaces, a unit of serviced office giant IWG (formerly Regus), which is reportedly preparing to launch a 20-storey co-working tower in Sheung Wan.
By courtesy of Mingtiandi