Six boutique hotels valued at $10b put up for sale

Staff reporter

Regal Real Estate Investment Trust (1881) and Regal Hotels International (0078) plan to sell six hotels in the urban area, whose market valuations amount to HK$10 billion, local newspaper Mingpao reported.

Regal REIT and its hotel arm both saw widened deficits in the first half, as the losses expanded with increased finance costs and higher fair value losses on financial assets.

The hotels on sale are all boutique properties, including iclub To Kwa Wan Hotel, iclub Fortress Hill Hotel, iclub Sheung Wan Hotel, iclub Wan Chai Hotel, iclub Mong Kok Hotel and iclub AMTD Sheung Wan Hotel, with a total of 1,411 rooms, equivalent to one room averagely worth about HK$7.09 million.

The sizes of the rooms in the hotels range from 151 to 700 square feet.

Most of the rooms are studios, but there are also several family suites and two-bedroom units.

The news of the sale comes on the heels of a report that New World Development (0017) is putting up its K11 Art Mall in Tsim Sha Tsui for sale to ease a cash crunch.

The company predicted its core operating profits in the fiscal year 2024 may decrease by 18 to 23 percent compared to a year earlier, in a range of HK$6.5 billion to HK$6.9 billion.

JP Morgan said that if NWD wants to sell K11 Art Mall, it means that its liquidity is tight because the mall is a core asset and has symbolic significance for the group.

Morgan Stanley said that if the firm completes the sale of the mall, the expected net debt ratio would fall to 63 percent.

Hong Kong interbank offered rates, on which the borrowing costs of most developers' bank loans are based, continued to remain at relatively high levels during the first half of the year, weighing on the liquidity of these companies and pushing them to implement more active capital recovery strategies.