The Connaught, Sai Ying Pun. (Image: Colliers and Knight Frank)
In a recent disclosure to the stock exchange, a partnership between the US-based private equity firm TPG Angelo Gordon and local developer Hanison Construction announced the sale of a property in Hong Kong’s Sai Ying Pun neighborhood at a significant loss. The joint venture, equally owned by both parties, agreed to sell The Connaught-a 52-room building situated just two MTR stops west of Central-for HK$410 million (approximately US$52.7 million). This price reflects a 44% decrease from their original purchase price seven years ago.
Market insiders suggest that the purchaser is an HSBC Trust acting on behalf of a prominent Hong Kong family. Hanison’s filing with the Hong Kong Stock Exchange reveals that the company anticipates a loss of HK$177 million on this transaction, which involves a 999-year leasehold interest. The sale aligns with TPG Angelo Gordon’s broader strategy to divest assets from an aging investment fund. Notably, Hanison had previously attempted to sell the property twice, with one tender listing the asking price at HK$1 billion.
Aligning Sale Price with Market Realities
According to industry sources cited by Mingtiandi, the agreed sale price of HK$410 million closely matches the outstanding loan balance secured against the property at 138 Connaught Road West. Hanison’s directors have described the sale as a strategic move to “unlock value” amid current market conditions. Additionally, the buyer will pay an extra HK$30 million for the hotel license associated with the property, a critical component for ongoing operations.
From Ambitious Pricing to Market-Driven Sale
TPG Angelo Gordon’s last public attempt to sell The Connaught was in September of the previous year, when the asking price stood at HK$600 million. The finalized deal translates to roughly HK$7.9 million (US$1 million) per room, a figure that reflects the current market’s valuation of hospitality assets in the area. The transaction is expected to close by mid-October.
Steven Cha, Partner and Head of TPG Angelo Gordon Asia
In 2018, the same partnership acquired the Citadines Harbourview from Singapore’s CapitaLand for HK$730 million. They invested an additional HK$40 million to renovate the 41,705-square-foot property, which boasts views of Victoria Harbour. This acquisition highlights their focus on premium hospitality assets in strategic locations.
Thomas Chak, now leading Colliers’ capital markets and investment services in Hong Kong, has previously highlighted The Connaught’s potential as corporate housing. Its proximity-just one MTR stop from the University of Hong Kong-makes it an ideal candidate for use as faculty dormitories or executive accommodations.
Strategic Land Acquisitions and Market Trends
On March 20, 2021, Hanison, controlled by the Cha family (who also oversee HKEX-listed developer HKRI), sold a 50% interest in a residential plot at 57A Nga Tsin Wai Road, Kowloon, to Angelo Gordon for HK$160.5 million. Later that year, the partners jointly acquired an adjacent site at 555 Nga Tsin Wai for HK$195 million, signaling their continued investment in residential development opportunities.
In recent years, serviced apartments and boutique hotels have emerged as highly sought-after property types in Hong Kong’s competitive real estate market. For instance, in February 2023, US fund manager PGIM Real Estate collaborated with Dash Living to purchase The Sheung Wan, a 56-key hotel located just 600 meters from The Connaught, at a price of HK$5.7 million per key. This transaction underscores the premium placed on well-located hospitality assets in the city.
