The firm is making its first major foray into the hospitality sector by converting a hotel property into the city’s biggest student accommodation facility to fill the gap in demand, CEO Nick Tang Ho-hong said in an interview. Along with other developments in hand, the group will be the busiest since its listing eight years ago, he added.

“2024 is the year we will be launching the most new projects since we got listed,” Tang said. “There are many opportunities in Hong Kong now, so we will continue to allocate money back and explore more in primary development.” As interest rates have peaked, “we feel this year would be a good year to continue promoting our projects,” he added.

For a start, it will turn the former Pentahotel in Kowloon into 720 rooms in the summer, targeted at student renters, Tang said. Wang On Properties and US investment manager Angelo, Gordon & Co bought the asset from New World Development for HK$2 billion (US$255.8 million) in December 2022.

The government of John Lee Ka-chiu last month scrapped most of the financing curbs, giving the market an immediate boost. The measures installed in the early 2000s to curb excessive speculation were no longer useful since prices slipped during the social unrest in 2019 and through the Covid-19 pandemic last year, according to local officials.

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Lower interest rates will be a welcome respite for the company and its industry peers, Tang said. The city’s developers have suffered cash outflows as sales cooled after 11 rounds of rate increases from March 2022 to July 2023, sending Hong Kong’s borrowing costs to the highest level since December 2007.

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“We were relatively pessimistic about the property market before the removal of property curbs, as the transaction volume was lukewarm and interest rates remained high,” Tang added. He now expects home prices to gain 5 per cent this year, while the rental market could rise by 8 per cent as demand strengthens.

Wang On Properties is 75 per cent-owned by Wang On Group. The developer adopted an asset-light strategy by forming joint ventures to trim spending and capital commitments during the recent downturn. Its partners include US investment manager Angelo, Gordon & Co., Dutch pension asset manager APG and US buyout firm KKR.

Their cooperative projects involve residential, commercial, car-parking and hospitality projects with total investment exceeding HK$15 billion, according to the group annual report.

Apart from the Pentahotel conversion, Wang On Properties in January unveiled a new luxury residential project known as Mount Pokfulam. It comprises seven detached houses, ranging from 3,654 sq ft to 4,810 sq ft, each with a garden and swimming pool.

In Wong Tai Sin, about 139 of the 230 units in its Phoenext housing project have been taken up since the first round of offering in mid-January. A 300-unit development on Finnie Street in Quarry Bay is expected to open for sale in the fourth quarter on a 4,200-sq ft site it acquired in June 2023 for HK$412 million.

Wang On separately partnered with APG in September 2022 when they acquired a 60 per cent equity interest in the property development project in Fortress Hill from cash-strapped mainland builder CIFI Holdings. The HK$2.9 billion development will open for booking in the third quarter and is due for completion in 2026.

Most of the company’s developments are small to medium-sized flats, and as long as they are priced near the market levels, they can be expected to receive a good response from buyers, Tang said.

“Hong Kong’s property market has entered a new era since the government dropped the property curbs,” he said. Mainland Chinese buyers would be interested, mainly due to higher rental yields, expected interest rate cuts and the introduction of the cash-for-residency scheme for ultra high-net-worth individuals, he added.