Shimao’s Tung Chung hotels sold for HK$2.7 billion
HK01 · 3 SOURCES1 day ago2 MIN
Summary
Shimao Group said the receiver of its Tung Chung hotel assets has entered into two inter-conditional sale and purchase agreements to dispose of the hotel properties and related business for a total of HK$2.7 billion, with the transaction expected to complete before the end of this year. The assets include the Sheraton Hong Kong Tung Chung Hotel and Four Points by Sheraton Tung Chung, which had earlier been taken over by banks after a loan default tied to the project. Shimao said the net proceeds will be applied by the receiver to partially repay outstanding debt under a syndicated loan agreement dated July 27, 2020, and it does not expect any net cash proceeds to be placed into its designated account. The buyer is a company owned by an investment vehicle associated with Malaysia’s ParkCity Group, part of the Samling Group.
Key Points
- Shimao announced that receiver-notified subsidiary Ming Yang had agreed to sell the hotels and related business to Oceanfront Hong Kong Limited for HK$2.7 billion
- The sale process began in June and the tender closed on August 31, with Sing Tao reporting that bidding was highly competitive before the final price was agreed
- The dual-branded Marriott-operated complex opened in 2020, has 1,219 rooms and about 610,000 square feet of gross floor area, including the T Bay retail podium
- Based on the HK$2.7 billion price, the deal works out to roughly HK$2.215 million per room and about HK$4,426 per square foot
- HK01 said earlier estimates put development cost at about HK$10,000 per square foot, implying the disposal was more than 55% below cost
Why It Matters
For Hong Kong readers, the deal shows how distressed commercial assets can change hands at steep discounts when lenders move to recover money after a default. It also underlines that even a large airport-area hotel complex with international branding may still be sold primarily to repay secured creditors rather than return cash to the original owner.