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The price of membership in Hong Kong’s most exclusive private clubs has fallen by as much as 20 percent on the secondary market over the past year, brokers said, as the city’s economy slows and foreigners and well-heeled residents leave the Chinese territory.
The Asian financial hub’s private members’ clubs have been an integral part of its business community since the British colonial era, with some institutions enjoying significantly cheaper rents under agreements that date back decades.
Rules vary, but individual and corporate club memberships usually require high payments and sometimes long waits. Secondary market prices for memberships took a hit during the pandemic as the territory’s strict zero-Covid policy drove many expats and residents out of the city. Prices continued to fall even after the end of Hong Kong’s lockdown rules.
Asking secondary market rates for membership at the Aberdeen Marina Club, a 40-year-old private club that spans 550,000 square feet and operates seven restaurants, as well as sports and family facilities including an ice rink and bowling alley, according to two brokerages that are trading private club memberships, fell nearly 20 percent to about HK$2.75 million ($350,000) from about HK$3.4 million in early 2023. Before the pandemic, such memberships would have cost as much as HK$4 million, they said.
Memberships of the Hong Kong Cricket Club, founded in 1851, now change hands for about HK$1.1 million, down from HK$1.4 million at the start of last year, according to Everfine Membership Services, another broker.
At the Kowloon Cricket Club, memberships are changing hands on the secondary market for about HK$900,000, brokers said, up from more than HK$1 million early last year. Membership at Discovery Bay Golf Club fell to HK$2.8 million from more than HK$3.1 million in the same period, they said.
A sense of crisis in the city’s clubs erupted this month when the nearly century-old American Club asked its non-American members to pay up to HK$1.5 million to keep their membership or leave the club, a move that was partly engineered. to help it maintain its non-profit tax status. The club backed down after a negative response from members.
“The desire for memberships has been hit by poor economic sentiment,” said Bena Wong, a consultant member at Fuji Consultants, a brokerage that deals in private club memberships. “People don’t splash money anymore. Fewer mainlanders were seeking membership thanks to China’s economic slowdown, he added.
Pressure on prices was also caused by the downsizing or departure from the territory of some multinational companies, which often have corporate memberships. The number of companies with regional headquarters in Hong Kong fell to 1,336 last year from 1,541 in 2019.
“The market has been quiet,” said Tony Chan, Everfine Membership Services chief commercial officer. “Some members have moved overseas while companies have shifted their base elsewhere.”
“The second-hand market is very reflective of the economy,” said the former Hong Kong banker, who is a member of four private clubs.
French bank Natixis forecasts that Hong Kong’s economy will grow by 2.6 percent this year, following a smaller-than-expected 3.2 percent growth last year.
Authorities in the territory are trying to attract wealthier individuals and professionals, including by offering tax incentives for family offices.
In March, the Hong Kong government re-launched an immigration capital investment scheme for those looking to invest HK$30 million in the city, attracting many mainlanders, although the program is only open to mainlanders who are permanent residents of a foreign country.
“The weak economy has taken its toll [on membership prices],” said Raymond Kwok, founder of brokerage BA Marketing & Co.