Mandarin Oriental International Ltd. has received interest from potential buyers of the Excelsior hotel in Hong Kong in what would be a test of the resilience of demand for the city’s commercial real-estate assets that has sent prices soaring.

There were at least five bids for the property valued at HK$30 billion ($3.8 billion), including a Chinese-backed consortium of Sun Hung Kai Properties Ltd. and Hysan Development Co., the Hong Kong Economic Journal reported on Saturday. Mandarin Oriental said Friday it had received offers while no decision had been taken on a sale. Sun Hung Kai and Hysan did not reply Sunday to emails seeking comment sent outside office hours.

The proposals will form the basis “for further consideration of the company’s strategic options,” according to a statement from the company. No assumption should be made regarding whether the property will or will not be sold, Mandarin Oriental said.

Mandarin Oriental said in June it was testing the market for a potential sale of the property on the waterfront overlooking Victoria Harbour in Hong Kong’s Causeway Bay district in light of “current strong commercial property valuations in Hong Kong.” The government has approved redevelopment of the site for a commercial building with a gross floor area of 684,000 square feet (63,546 square meters), according to Bloomberg Intelligence.

“Robust investment demand for Hong Kong office space, driven by record-breaking land sales, could prompt landlords to sell their commercial properties” in the second half, Patrick Wong, an industry analyst with Bloomberg Intelligence, wrote in May.

Chinese Tourists

Hong Kong hotels will struggle to capture high-end, transient Chinese tourists amid rising new supply over the next 20 years, Bloomberg Intelligence analyst Margaret Huang said in a report in June. Hotel room prices in Hong Kong face further declines as high-end Chinese leisure travelers opt to take vacations at other Asian or long-haul destinations, Huang said, citing Mandarin Oriental among hotel operators whose revenue per room available would come under pressure.

Earlier this year, two Chinese companies bid a record HK$16.9 billion ($2.2 billion) for a piece of waterfront land zoned for residential development.

Mandarin Oriental, controlled by trading company Jardine Matheson Holdings, operates 30 hotels and eight residences in 20 countries and territories. The group’s hotels are all five-star luxury properties, with the exception of The Excelsior, which is rated four star. It also has a strong pipeline of hotels and residences under development.

Shares of Mandarin Oriental traded on the Singapore stock exchange surged 21 percent on Friday to close at S$2.56. That was the biggest jump in almost nine years and the highest close since October 2007.

The Excelsior, which opened in 1973, sits on the first land parcel sold after Hong Kong became a British colony in 1841.

©2017 Bloomberg L.P.

This article was written by Andreea Papuc from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

Photo Credit: Tourists pose for photographs on a viewing terrace at Victoria Peak in Hong Kong. Billy H.C. / Bloomberg