A roundup of this weekend's hotel news, from Hong Kong billionaire Cheng Yu-tung's purchase of five hotels, including Manhattan's Carlyle, the upcoming relaunch of Beijing's Yi House Hotel as the Grace Beijing, and Swire's sale of the Festival Walk complex in Hong Kong.
HK Billionaire Cheng Buys Five Luxury Hotels From Maritz, Wolff & Co. and Rosewood Corp. For US$570 Million
Bloomberg writes that the family of Hong Kong billionaire Cheng Yu-tung has purchased five hotels, in the United States and British Virgin Islands, from Maritz, Wolff & Co. for around US$570 million. Properties included in the deal are the Carlyle Hotel in Manhattan, the Rosewood Inn of the Anasazi in Santa Fe, the Rosewood Little Dix Bay in the British Virgin Islands, and two Dallas-area hotels, the Rosewood Crescent Hotel and Rosewood Mansion on Turtle Creek. As Alan Reay, president of Atlas Hospitality Group in Irvine, California, told Bloomberg, Chinese investors like Cheng are "looking to invest in high-end hotels in large U.S. cities in anticipation of an influx of travelers from Asia."
“It is driven by the combination of the strength of the Chinese economy and the relative strength of their currency to the dollar,” Reay said in a telephone interview. “They obviously see the travel industry as a growth industry,
especially with the growing middle class in China, which is increasingly traveling to other parts of the world
Luxury hotels are of particular interest because high-end lodging has had the biggest recovery after the financial-market crash in late 2008, he said.
“This deal demonstrates the advantage for Asian investors willing to use their relatively lower cost of capital and longer-term investment horizon to acquire strategic investments here in the U.S.,” Flip Maritz said in a telephone interview.
Swire Sells Hong Kong's Festival Walk To Mapletree In Largest Ever Property Deal
This weekend, Swire Poperties -- which includes Beijing's Sanlitun Village in its growing China portfolio -- inked a deal to sell Hong Kong's sprawling Festival Walk mall and commercial complex to Singapore's Mapletree Investment (a fully-owned subsidiary of the Singaporean government's sovereign wealth fund, Temasek Holdings) for HK$18.8 billion (US$2.4 billion).
This is Swire's largest-ever property deal, and is a key part of the group's plan to raise cash for expansion in China, according to a company release. In addition to Swire's Sanlitun Village in Beijing, which comprises a shopping mall and the boutique Opposite House hotel, the company has two mixed-use developments in Guangzhou (Taikoo Hui) and Beijing (INDIGO) that will be wrapped up in phases later this year. In 2015, the company will open its fourth China property, the Dazhongli Project -- a commercial complex, retail district and luxury hotel -- on Shanghai's Nanjing Road West.
Festival Walk is a mid- to up-market retail and office building in Kowloon Tong. It was built in 1998 and comprises around 580,000 square feet of retail area and 220,000 square feet of office space. In 2006, Swire bought the 50% stake it didn’t already own in Festival Walk from Citic Pacific for HK$6.18 billion, placing a valuation of around HK$12.4 billion on Festival Walk at the time.
The history leading up to the sale has obviously led to speculation about whether Swire was forced to sell Festival Walk because it was unable to IPO.
This deal would seem to be a win-win for Swire Properties and Mapletree. Mapletree gets its first-ever commercial property in Hong Kong and Swire gets $2 billion+ to fund its mainland China efforts.
Grace Hotels Group Acquires Beijing's Yi House Hotel, Plans China Expansion
One of Beijing's most interesting "art hotels," the Yi House Hotel in the city's 798 art district, has been acquired by Grace Hotels for an undisclosed amount. Due to relaunch later this month as the Grace Beijing, the 30-room boutique hotel will maintain its same Chinese contemporary art-influenced interiors while its in-house restaurant, "Fennel," will be renamed "Yi House" in honor of the hotel's origins.
The Grace Beijing will be the company's first hotel in the Asia-Pacific region, although Grace plans a wider expansion effort in China and elsewhere "in coming years," according to a company release.