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Sandy Li

Great Eagle Holdings has expressed strong interest in building up its hotel portfolio, especially along the new airport railway line.

  Despite its recent GBP100 million (about HK$1.19 billion) acquisition of the five-star Langham Hilton hotel in London, assistant director Adrian Lee Ching-ming said Hong Kong remained its investment focus.

  'We will continue looking for high-quality hotels. In the meantime, we will also be very active in pursuing other development opportunities in Hong Kong. Our focus in the territory will not be diluted,' he said.

  Great Eagle has been trying to expand its hotel business in recent years. Last year, it lost narrowly in the race to develop and operate the new airport hotel.

  Undaunted by the failure, Mr Lee said the group was keen to add an additional Hong Kong hotel to its portfolio.

  While plans for a hotel block to be incorporated in its Mongkok urban renewal project had not yet been finalised, he said the company was very keen to bid for hotel projects along the airport railway.

  At least four hotels at new MTR stations in Tai Kok Tsui and Kowloon, involving 3,500 rooms, will be put up for tender in the coming years.

  Analysts believed the group would be more aggressive in acquiring hotels after it had generated cash flow from disposals of office floors in Citibank Plaza in Central and Morrison Plaza in Wan Chai.

  Faced with delays in the Mongkok redevelopment, it had more capital reserves to pursue expansion on the hotel side, they said.

  In Hong Kong, Great Eagle owns the five-star Renaissance Hotel and the four-star Eaton Hotel. The 392-room Eaton Hotel is being extended by 80 rooms.

  The group also owns three furnished apartment buildings under the Eaton chain and runs the Yat Tung Heen restaurant chain.

  But Mr Lee said it had no immediate plans to spin off the hotel division.

     Grand Eaton Hotels International senior vice-president Philip Louie said the group would like to expand its hotel operations to key international gateway cities such as London, Beijing and New York.

  The group would mainly focus on four and five-star hotels, which offered the best yield, he said.

  Analysts expected that the group would finance future acquisitions by internal resources and bank borrowing.

   For instance, the group would receive $230 million profit from the sale of space at Citibank Plaza this year and another $736 million from sales at Morrison Plaza.

  ING Baring Securities analyst John So said the recent acquisition showed that Great Eagle would like to diversify into hotel operations further.

  The group's shift to hotel expansion could be partly due to the postponement of its Mongkok urban redevelopment project, one analyst said. 'It is more realistic for the group to add to its hotel portfolio in preparing for a separate listing in the next two years,' he said.



Great Eagle poised to add to hotel portfolio