Hong Kong 'shop king' Tang Shing-bor reaches settlement on unpaid rent of US$1.5 million for hotel property

By Sandy Li

/ SCMP |

September 1, 2020 12:10 PM SGT

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SINGAPORE (EDGEPROP) - Billionaire Tang Shing-bor, Hong Kong’s “shop king”, has swiftly settled a court case brought against him over unpaid rent of nearly HK$12 million (US$1.5 million) for a hotel property in Tsim Sha Tsui.

The settlement comes amid market speculation that the tycoon is under financial stress after the Tang family has divested more than HK$1 billion worth of property assets so far this year.

In its first public response to the legal action, the spokesman of Stan Group, the family office representing Tang’s assets, said in a written reply to the South China Morning Post that “the court case about the property at 182 Nathan Road has been withdrawn by the owner.”

To quash market rumours about its financial health, Stan Group said “operating income of our operation businesses, including hotel management, only accounts for a small proportion of the group’s revenue, so the Covid -19 has not imposed a significant impact on our income”.

Tang Shing-bor, also known as Hong Kong’s ‘shop king’. Photo: SCMP

The company said that as part of its strategy it constantly reviews its HK$80 billion asset portfolio and sells noncore assets at favourable prices.

“We have been approached by several investors with an interest to acquire our properties, which is a vote of confidence in the value of our assets. In the past, the group has recorded considerable returns on each sale,” it said.

The four owners of the building sued Prince Winner, in which Tang and his youngest son Stan Tang Yiu-sing are directors, for not paying rent for 10 months and three quarters of government rates from October 2019 to July 2020, according to the writ filed to the High Court on August 12.

Prince Winner had signed a five-year lease from March 2019 to January 2024 for HK$1.15 million a month, according to the writ.

The group used the property as a hotel, under the name of Minimal Hotel Avenue, which is managed by Tang’s Living Group, a unit of the Stan Group, chaired by the 34-year-old Stan Tang, who is widely seen as taking over the reins of the group’s HK$80 billion property portfolio. There are four other Minimal branded hotels in Sham Shui Po, Causeway Bay, Mong Kok and Hung Hom.

Tang Jnr said in August 2017 that he aimed to be one of the top five hoteliers in Hong Kong and planned to spend about HK$10 billion to acquire 14 hotels and two new residential projects for use as serviced apartments. He also said then that he eventually planned to float this portfolio under Tang’s Living Group on the Hong Kong stock exchange.

But the flotation plan has hit a snag as the hotel industry was hurt first by the anti-government protests in the second half of 2019 and the Covid-19 pandemic this year.

The hotel sector has been suffering from a slump in both occupancy and average room rates as the tourism industry has come to a standstill. Visitors to Hong Kong plunged 89.9 percent to 3.5 million in the first half of the year from 34.87 million a year ago, according to data from the city’s tourism board.

Meanwhile, the Tang family has been steadily divesting assets this year, which analysts say could be because they are over leveraged and that their businesses are under stress.

“Most investors with strong financial strength are unlikely to sell in such poor market sentiment unless they need to raise cash,” said Kenny Tang Sing-hing, chief executive of Royston Securities. “Today, if an asset is valued at HK$1.2 billion, it will be cut down to HK$800 million in face of lower rental yield and economic downturn.”

Last week, the Tang family offered 80 percent of its shares in a six-storey residential building in Kowloon City for public tender at a valuation of HK$650 million, according to the sole agent Knight Frank.

A month ago, Tang had appointed JLL to offer a 5,654 sq ft site near Prince Edward MTR station for tender. The site, currently occupied by old tenement buildings, is estimated to be worth HK$450 million, according to JLL, the sole agent.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved.

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