AEW Divests Hong Kong Central Serviced Apartments for HK$240 Million

US real estate private equity firm AEW has reportedly sold a 14-storey serviced apartment building in Hong Kong's prime Central district for HK$240 million (approximately $30.66 million). The property, formerly known as The Mood Hotel, was acquired by AEW in 2015 and subsequently refurbished into the Aveny serviced apartments.

Key Takeaways

AEW sold the 14-storey Aveny serviced apartment building in Central, Hong Kong.
The reported sale price was HK$240 million.
The buyer is a local individual investor planning a long-term hold.
AEW had purchased the building in 2015 for around HK$220 million.

Property Details and Sale Process

The Aveny building, located at 31 Wyndham Street, comprises 11 serviced apartments, each occupying an entire floor. The building also features a ground-floor restaurant and is situated in the heart of Hong Kong's entertainment district, near Lan Kwai Fong and SoHo, and a short walk from the Central business district. AEW had initially sought HK$280 million for the property last year but adjusted its expectations downwards due to a slowdown in the Hong Kong market during the latter half of the year.

Buyer and Investment Strategy

The buyer is identified as a local individual investor who intends to retain the property for long-term investment purposes. Antonio Wu, deputy managing director of Capital Markets and Investment Services for Colliers, represented AEW in the transaction. While Wu did not confirm the exact sale price, he indicated it was below the HK$250 million figure reported in some local media.

AEW's Investment and Refurbishment

AEW acquired the former Mood Hotel building in 2015 for approximately HK$220 million. They then undertook a refurbishment to transform it into the Aveny serviced apartments. The 8,916 square foot building was reconfigured to offer 11 units, each approximately 57 to 68 square metres. These apartments are primarily targeted at working financial professionals.

Rental Performance and Market Position

The Aveny apartments offer various services, including daily housekeeping and complimentary wireless internet. The average unit rental rate is reported at HK$52 per square foot, which is about 30 percent higher than the average residential rental rate of HK$40 per square foot in the surrounding area. Monthly rents for the apartments range from HK$32,000 to HK$43,000.

Sources

AEW Sells Hong Kong Apartments for HK$240M, Mingtiandi.