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Amy Chew

THE 500-room Hong Kong Renaissance Hotel in Tsim Sha Tsui has been sold to the Great Eagle group for $2.03 billion.

  The group - via its subsidiary Harvest Star International - is buying the property from Indonesian conglomerate Abundance Assets as an on-going concern.

  The value per room achieved under the deal is $4.06 million.

  Great Eagle, which owns the Eaton Hotel on Nathan road, intends to keep the hotel's current management team and has no plans to redevelop either the property or its site.

  Under the sale conditions, the group was required to keep the Renaissance name as it had to assume the previous owner's licence agreement with the Ramada Group.

  According to Great Eagle, the hotel will be held as a long-term investment and its acquisition represents an enlargement of the group's hotel interest as Great Eagle's directors believe the prospects for the hotel industry are bright.

  Great Eagle Holdings managing director Lo Ka-shui said: ''With the current trend of rising demand for hotel rooms in the territory and the hotel's excellent location, we are confident that the hotel will produce good results for Great Eagle.

  ''The forthcoming re-organisation of Great Eagle will enable us to redirect cash resources which we have been building up for the purpose of the Mongkok project, into other ventures in the hotel, retail and residential sectors.

  ''Our acquisition of the Renaissance Hotel is a solid example of the new ventures Great Eagle Holdings will be undertaking.''   A deposit of $350 million has been paid and a further sum of $250 million has to be paid on April 7.

  The balance of the payment is to be made on August 1.

  The hotel made a pre-tax profit for the eight months ended November 30, 1993 of $65 million.

  The hotel deal comes two days after Great Eagle announced a $540 million joint-venture agreement to redevelop the landmark Jin Jiang Hotel in Chengdu, China.

  The project involves the renovation of the Jin Jiang Hotel, and the construction of a new five-star hotel and a commercial complex on the hotel site.

  The new hotel, which will be named the Sichuan Eaton Jin Jiang Hotel, will be built adjacent to the existing Jin Jiang Hotel.

  The 300-room five-star hotel will cost $230 million to build and will house restaurants, shops and entertainment outlets while the new commercial complex will cost $230 million to develop and will comprise office space, a shopping centre, and a basement car park.

  Gross floor area will be 36,000 square metres.

  Great Eagle's acquisition yesterday came as Stelux Holdings said it was negotiating to buy the 313-room Ambassador Hotel from Lippo.

  The Ambassador negotiations are raising eyebrows as the property was taken over by Lippo only four months ago for $1.29 billion.

  It is understood from the market that Lippo has been offered about $2.05 billion for the property.

  Lippo holds the property through its subsidiary Hong Kong China.

  Lippo was due to tear down the hotel and redevelop the site into a commercial building.

  Last year, there was a spate of hotels bought with the intention of redeveloping their sites into commercial buildings.

  The trend was sparked by the view that a quicker and higher return could be gained from a commercial building than a hotel.

  Among the notable hotel sales in 1993 was the 660-room Lee Gardens Hotel in Causeway Bay.

  The property was sold for $2.45 billion to Hysan Development, which is spending a further $4 billion to redevelop the site into a commercial complex in the style of Pacific Place.

  That deal was followed by the sale of the China Harbour View Hotel which went for $620 million to Pearl Glorious Investment.

    Its site will be redeveloped into an office tower.

  The following month, Pearl Glorious formed a joint venture with several local investment groups to buy a 280-room hotel in Yau Ma Tei for $430 million.

  The property was retained as a hotel but renamed the Pearl International Seaview Hotel.



Great Eagle pays $2b for Renaissance