Arabian Post Staff -Dubai
New World is discussing the disposal of its 50% interest in the property, while Abu Dhabi Investment Authority, or ADIA, is also in talks to sell its half, people familiar with the negotiations said. The discussions remain private and may not result in an agreement, leaving the final structure, valuation and timing subject to negotiation.
The proposed transaction would give UOL control of a prominent 381-room hotel at 18 Hanoi Road in Tsim Sha Tsui, one of Hong Kong’s main shopping and tourism districts. The hotel forms part of the K11 complex and has direct access to the Tsim Sha Tsui and East Tsim Sha Tsui MTR stations.
Neither New World nor UOL has announced a binding agreement. The possible sale is being pursued as New World continues efforts to raise liquidity and strengthen its balance sheet after a prolonged property downturn strained the finances of several Hong Kong developers.
The company has been examining ways to monetise hotel and investment-property holdings while seeking to preserve capital for its core development business. New World and ADIA have jointly owned the Hyatt Regency Tsim Sha Tsui, Grand Hyatt Hong Kong and Renaissance Harbour View Hotel through a venture established in 2015.
That joint venture was created after the three properties were transferred at an aggregate consideration of HK$18.5 billion. New World and a wholly owned ADIA subsidiary each held 50% of the venture, giving the Abu Dhabi sovereign wealth fund a substantial presence in Hong Kong’s luxury-hotel market.
The Hyatt Regency Tsim Sha Tsui was valued at roughly HK$3.39 billion when the three-hotel transaction was completed in 2015, based on transaction data from that period. A sale at around HK$3 billion would therefore place the current indicated value below that earlier level, although the ownership structure, market conditions and transaction terms are not directly comparable.
Earlier this year, New World had explored a sale of its interest in the three-hotel joint-venture portfolio, which was valued at about US$2 billion. The latest negotiations focus on the Hyatt Regency Tsim Sha Tsui rather than requiring a disposal of all three properties together. That approach could allow New World and ADIA to realise proceeds from an individual asset while retaining their interests in the Grand Hyatt and Renaissance Harbour View if no separate transactions are agreed.
The talks with UOL come as New World pursues other fund-raising initiatives. On Monday, the developer said it had received Shanghai Stock Exchange approval for the proposed spin-off and listing of a real estate investment trust backed by mainland China assets. The planned offering is expected to raise about 3.82 billion yuan, or roughly US$570 million, subject to final approvals and market conditions.
New World reported a HK$3.73 billion loss for the six months ended December 31, narrowing from HK$6.6 billion a year earlier. The developer has also undertaken refinancing and asset-disposal measures as it works to manage debt obligations against a still-recovering Hong Kong property market.
UOL, listed in Singapore, has a diversified portfolio spanning property development, investment properties, hotels and serviced suites. The group says it has about S$22 billion in total assets and owns or manages roughly 50 hospitality properties through its hotel subsidiary, Pan Pacific Hotels Group, and other interests.
Its hospitality brands include Pan Pacific, PARKROYAL COLLECTION and PARKROYAL, giving the company an established operating platform across Asia and other international markets. An acquisition in Hong Kong would add a major gateway-city hotel to that portfolio, though no operating arrangements have been disclosed in connection with the talks.
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