According to sources, Shimao Group, a property developer in China, is looking to sell its hotel located near the Hong Kong international airport. This decision could aid the company in repaying its debts. Based on market valuations, the transaction is anticipated to bring in a minimum of HK$6.5 billion ($828 million). Last year, like many other Chinese property developers, Shanghai-based Shimao defaulted, and is presently undergoing the process of restructuring its offshore debt worth $11.8 billion.
According to sources, Shimao Group, a property developer in China, is looking to sell its hotel located near the Hong Kong international airport. This decision could aid the company in repaying its debts. Based on market valuations, the transaction is anticipated to bring in a minimum of HK$6.5 billion ($828 million). Last year, like many other Chinese property developers, Shanghai-based Shimao defaulted, and is presently undergoing the process of restructuring its offshore debt worth $11.8 billion.
The Sheraton & Four Points by Sheraton Tung Chung Hotel located in Hong Kong, which is the second largest hotel in the financial district in terms of the number of rooms, was opened by Shimao in late 2020. The hotel is now up for sale, and it was purchased by Shimao in 2014 for HK$1.83 billion.
According to Oscar Chan, the head of capital markets in Hong Kong for JLL, the hotel’s occupancy rate has significantly improved after the lifting of travel restrictions in late 2020, and with the current peak in interest rates, Shimao is likely to fetch a higher price than it would have when it defaulted on its debt last year. Chan added that the hotel will be sold via an Expression of Interest (EOI) process, and the first round of submissions will be accepted after Easter, in early April.
According to Oscar Chan, a significant number of local investors, foreign funds, and major property developers have shown their interest in purchasing the hotel. Shimao’s shares listed on the Hong Kong stock exchange have been halted for a year, awaiting the disclosure of the company’s financial results for 2021.
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