Southeast Asia-focused hostel chain Mad Monkey eyes Hong Kong as it plans to open 50 properties over the next three years
Singapore-based private equity fund EXS is looking to develop a chain of hostels in Hong Kong aimed at young travelers and digital nomads.
EXS Property Innovation Concepts VCC, a fund platform focused on “new economy real estate” across Asia, recently invested US$4.6 million for an undisclosed stake in the specialist hostel operator in Southeast Asia Mad Monkey.
After a successful initial fundraising, Mad Monkey aims to open up to 50 hostels over the next three years in Asia and Australia, said Chris Tai, director of EXS, which has led about $1 billion in hostels. investments in real estate businesses including residential, office, data centers and hostels since its founding in 2007.
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“Places like Hong Kong are very high on the list,” Tai said.
EXS’s plan comes after the Hong Kong government said last week it would ease some travel restrictions from April 1. These include lifting the ban on flights from Australia, Britain, Canada, France, India, Nepal, Pakistan, the Philippines and the United States and reducing hotel quarantine for Hong Kong residents arriving at seven days from 14.
As many countries turn to living with the virus rather than trying to keep it out, non-residents cannot enter Hong Kong except those arriving from mainland China, Macau and Taiwan.
Mad Monkey hostels in Cambodia have been fully booked after the country opened its borders to all vaccinated tourists, said Klara Grintal, Mad Monkey’s marketing director.
Oscar Chan, head of capital markets at JLL in Hong Kong, said the accommodation segment targeting “the high-end YMCA-like backpacker market” had high potential.
Mad Monkey, founded by four backpackers, opened its first Phnom Penh hostel in Phnom Penh, Cambodia in 2011. It has now expanded to 11 locations in six countries, including Sydney in Australia, Bangkok in Thailand and Cebu in the Philippines.
The hostel chain has earned a reputation among young digital nomads and other experience-oriented travelers in Southeast Asia for providing sustainable and culturally immersive travel experiences.
Unlike traditional hostels, Tai said Mad Monkey properties include between 50 and 200 beds and have significant common space for guests to relax. He added that EXS was reviewing a few properties in the Tsim Sha Tsui, Jordan and Yau Ma Tei areas of Hong Kong with Mad Monkey and assessing their potential.
Last year, seven Hong Kong hotels changed hands for a total of HK$5.92 billion ($756 million), according to JLL data.
Some hoteliers have converted their properties into long-term rentals, student accommodation or cohabitation in the absence of tourists.
In Hong Kong, the supply of rooms provided by traditional guesthouses fell by more than 6% to 11,924 in the two years to September 2021. This came after anti-government protests and travel restrictions that have monitoring to contain the Covid-19 pandemic. caused a 99% drop in tourist arrivals.
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