Hong Kong investors pick up St Andrews resort hotel in sign of growing appetite for Scottish properties

Real estate investments by Hong Kong investors this year have surpassed total in 2018, according to Real Capital Analytics

Lai Sun group picks up a 211-room resort hotel in St Andrews in latest expansion in outside London market

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The Fairmont St. Andrews has been acquired by Hong Kong-based investors amid signs of growing appetite for Scottish properties. Photo: Handout

Published: 8:45am, 18 Dec 2019Updated: 9:46am, 18 Dec 2019

Hong Kong-based investors have been quietly buying up properties in Scotland, channelling their capital away from home amid months of anti-government protests. A luxury hotel in golf resort at St Andrews is the latest addition to the statistics.

Lai Sun Development acquired a 50 per cent share in Fairmont St Andrews in Fife for an undisclosed sum, according to a company statement on December 12. The purchase added to its current portfolio of hotels in Hong Kong and Vietnam, while extending its reach in the UK market beyond London.

The seller, California-based real estate investment group Kennedy Wilson, owned the property for more than four years following its 32.4 million-pound deal in August 2014. The 211-room hotel is located about 12 minutes’ car drive from the Old Course at St Andrews, which hosts the 150th Open in July 2021.

This year, investors from Hong Kong have poured US$82 million into Scottish real estate such as flats, offices, hotels and seniors housing, according to data compiled by Real Capital Analytics involving transactions worth at least 5 million euros through December 16. The volume has surpassed the US$29 million sum recorded in 2018.

“We have a track record in hospitality and lifestyle businesses and now a strategy to expand into the golf-related hospitality and leisure space,” said Ronald Tham, an executive director at Lai Sun. “In this particular instance, we have expanded our hotel portfolio through the acquisition of the Fairmont in St Andrews, which is in the home of golf.”

Glasgow-born Ronald Tham of Lai Sun group believes that Scotland will become more popular among foreign tourists. Photo: Handout

A combination of pull and push factors could explain the trend. The current slump in the number of tourists in Hong Kong has prompted hotel operators and investors in the city to deploy their funds elsewhere, and the growing wealth among Asia’s super-rich has increased demand for luxury travels in top-notch locations.

“The Hong Kong hotel industry is going through a hard downturn,” said Maggie Hu, assistant professor of real estate and finance at the Chinese University of Hong Kong. “I believe many hotel operators will look elsewhere for more stable business environment and for better returns.”