Hong Kong and foreign investors are looking to offload luxury hotels in Shanghai but have received a lukewarm response despite being priced at a loss, mainland media says, indicating the sluggish economy and slow tourism recovery in China.
Buyers were not forthcoming although the asking prices of the five-star hotels were as low as 8,000 yuan to 9,000 yuan (US$1,240 to US$1,390) per square meter, Securities Times reported.
It was understood that renovations for each hotel room cost at least 10,000 yuan per square meter, which meant the owners were prepared to suffer a loss.
On the selling list were hotel clusters owned by Greenland Holdings in Hongqiao, Sofitel Shanghai Hongqiao Hotel, Renaissance Shanghai Yu Garden Hotel and Hotel Nikko Shanghai, the report said.
In Wuxi, a city near Shanghai, Hong Kong property developer Wharf Holdings in 2017 put on the market a high-rise building that featured grade A offices and a five-star hotel, the report said, citing people familiar with the matter. More than four years later, no deal has been closed.
Not only in Shanghai, but many hotels in Beijing and Guangdong province were up for sale too, Apple Daily found on mymyhotel.com, a hotel trading platform in mainland China.
The platform showed at least 21 Shanghai hotels, comprising 14 boutique setups and seven of a larger scale, with 100 or more rooms. Most of them were fairly new, having been built after 2010.
In Guangdong, 53 hotels were found on the trading platform, mainly boutique hotels with fewer than 100 rooms. The province’s situation seemed to be worse than in Shanghai.
The large number of hotels for sale reflected poor economic development in mainland China due to the continuing COVID-19 pandemic, Hong Kong economist Law Ka-chung said. He expected prospective investors to wait and buy later, after the economy had recovered.