New World Development is in discussions to divest its 50% interest in a group of three Hong Kong hotels with a combined value of $2bn, reported Bloomberg, citing sources familiar with the matter.
The talks involve Aravest, a Singapore-based real estate asset manager backed by Sumitomo Mitsui Finance & Leasing.
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The Abu Dhabi Investment Authority owns the remaining 50% of the hotel portfolio, which consists of the Grand Hyatt, Renaissance Harbour View Hotel, and Hyatt Regency in Kowloon.
If a deal is reached, New World Development is expected to receive $300m in cash after settling debt linked to the asset, according to one source with direct knowledge.
The sources also noted that the negotiations remain ongoing and may not lead to a transaction.
The cash raised from the potential hotel sale would account for only a small fraction of New World Development’s total net debt, which was nearly HK$122.7bn ($15.6bn) at the end of last year.
The company has been seeking broader solutions for its debt.
Earlier negotiations with investors such as Blackstone on selling a stake in the firm stalled over concerns related to loss of control. The lack of progress in talks was also due to contingent government liabilities tied to a shopping centre near Hong Kong International Airport.
Aravest was formed in 2024 after ESR Group sold the private funds business of ARA Asset Management to a consortium led by Sumitomo Mitsui Finance & Leasing.
It previously managed the acquisition of the former Hotel Miramar in Singapore through a fund structure, and also oversees properties in the office, retail and hotel sectors.
