Oceanfront Hong Kong will acquire the Sheraton Hong Kong Tung Chung Hotel and Four Points by Sheraton Hong Kong, Tung Chung, from indebted Chinese developer Shimao Group for HK$2.7bn ($344m).
The receivers of the two properties have agreed to sell the dual-branded complex to Malaysia’s ParkCity Group-controlled Oceanfront Hong Kong, the South China Morning Post reported, citing a Shimao Group filing to the Hong Kong stock exchange.
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Una Ge, a partner and managing director at AlixPartners who acted as one of the receivers, confirmed to the publication that ParkCity holds a majority interest in Oceanfront.
The Malaysian property company also maintains development undertakings in Vietnam.
The two properties together represent the territory’s third-largest hospitality asset measured by room inventory.
In the filing, Shimao said: “This will reduce the overall indebtedness of the group and strengthen its financial position, consistent with the group’s ongoing efforts to address its liabilities in an orderly manner.”
The completion of the transaction is anticipated prior to the close of the year.
Property advisory company Savills organised the competitive bidding procedure for the 1,219-key asset, which is located on Lantau Island.
The property was completed in 2020. It was estimated to cost more than HK$10,000 per square foot to develop, according to the publication.
The global tender for the transaction was launched on 23 June, and bidding was closed on 31 August.
The HK$2.7bn transaction value remains open to adjustments and encompasses the underlying physical properties alongside their commercial hotel operations.
Ge outlined that the acquisition was framed through a pair of “interconditional” asset-sale agreements rather than a corporate share transfer.
This legal structure permits the acquirer to take ownership of the real estate and commercial operations without absorbing the debt obligations lingering within the borrowing company.
In a separate announcement issued by AlixPartners and operating partner Marriott, both organisations confirmed that Marriott will continue to manage the dual properties under their existing brands once the transaction concludes.
