Exclusive Clubs in Hong Kong Suffer Price Drop: Membership Numbers Plummet

The price for memberships in Hong Kong's most exclusive private clubs dropped by up to 20 percent on the secondary market in the past year. Brokers report this decline amidst a weakening economy and the exodus of wealthy expatriates and residents. Since the British colonial era, private membership clubs have been an integral part of the business community in the Asian financial hub. Some of these clubs benefit from favorable long-term leases established decades ago. While individual and corporate memberships typically require high payments and often involve long waiting times, secondary market prices took a hit during the pandemic. This was due to the strict zero-Covid policy, which led many expatriates and residents to leave the city. Despite the lifting of lockdown rules, price declines continued. For example, prices for a membership at the Aberdeen Marina Club, which spans 550,000 square feet and includes seven restaurants as well as sports and family facilities like an ice rink and a bowling alley, fell by nearly 20 percent. According to two brokers who trade memberships for private clubs, the price dropped from about HKD 3.4 million at the beginning of 2023 to around HKD 2.75 million (USD 350,000). Before the pandemic, comparable memberships could cost up to HKD 4 million. Membership at the Hong Kong Cricket Club, founded in 1851, is currently traded at around HKD 1.1 million, down from HKD 1.4 million early last year, reports Everfine Membership Services, another broker. Similar trends are observed at the Kowloon Cricket Club, where secondary market prices fell from over HKD 1 million early last year to about HKD 900,000. At the Discovery Bay Golf Club, prices dropped from over HKD 3.1 million to HKD 2.8 million in the same period. The crisis became evident when the nearly century-old American Club asked its non-American members to pay up to HKD 1.5 million to maintain their membership or leave the club. This move was also aimed at preserving its non-profit tax status. After negative reactions from members, the club retracted this demand. "Interest in memberships has been affected by the poor economic situation," said Bena Wong, a membership consultant at Fuji Consultants. "People are not spending money as easily anymore." Fewer mainland Chinese have been seeking memberships due to the economic slowdown in China, he added. The downsizing or withdrawal of some multinational companies, which often hold corporate memberships, has also increased pressure on prices. The number of companies with regional headquarters in Hong Kong dropped from 1,541 in 2019 to 1,336 last year. "The market was quiet," noted Tony Chan, sales director at Everfine Membership Services. "Some members have moved abroad, while companies have relocated." "The secondary market is a reflection of the economy," commented a former banker in Hong Kong who holds four memberships in private clubs. French bank Natixis forecasts economic growth of 2.6 percent this year, following less-than-expected growth of 3.2 percent last year. The city's authorities have been trying to attract more wealthy individuals and professionals, including through tax incentives for family offices. In March, the Hong Kong government resumed an investment program requiring capital investments of HKD 30 million in the city. The program has attracted many mainland Chinese, although it is only open to mainland Chinese who are also permanent residents of another country. "The weak economy has taken its toll [on membership prices]," said Raymond Kwok, founder of brokerage firm BA Marketing & Co. "But when prices reach a certain level, they will stabilize and possibly recover.