Shimao targets 5b yuan expansion in hotels
Shimao Property Holdings has earmarked more than five billion yuan to expand its hotel business in the next three years before spinning off the hospitality assets to seek a separate listing on the Hong Kong stock market, chairman Hui Wing-mau said.
The man ranked by Forbes as the mainland's ninth-richest, told reporters yesterday at the grand opening of the Hyatt on the Bund that Shimao was eyeing 20 hotels nationwide before 2010, adding the country's buoyant economy bodes well for the hospitality sector.
'We aim to become one of the biggest builders of five-star hotels in China,' Mr Hui said. 'The hotel business will become one of our three core businesses before 2010.'
At present, the hotel operation accounted for only a small portion of Shimao's business which also included residential and commercial, Mr Hui said.
Capitalising on its huge land reserves of five million square metres around the country, Shimao was speeding up its expansion into the lucrative hotel industry, he said.
Shimao now has three Shanghai-based hotels in operation. It is building its fourth in Shanghai and another one in Nanjing.
The mainland's tourism industry will have its day in the sun amid the upcoming 2008 Beijing Olympics and 2010 Shanghai World Expo.
The industry is expected to rake in total sales of one trillion yuan this year, up 11.7 per cent year on year, according to the China National Tourism Administration.
Mr Hui has reaped huge gains from the diversification as the value of the hotels in the mainland's commercial capital has increased.
The Hyatt on the Bund was estimated to be worth 10 billion yuan compared with the total investment of two billion yuan, he said.
Another five-star hotel on Nanjing Road was valued at more than one billion yuan, he added.
'We will grow the hotel business bigger and stronger by 2010,' Mr Hui said. 'We will create a new financing platform for the business after share listing.'
Shimao earlier this year said that it would transfer 7.7 billion yuan of assets into its Shanghai-listed sister company Shanghai Shimao, turning the A-share firm into a commercial real estate concern.
The deal, part of the group's restructuring plan, is subject to shareholders' and regulators' approval. It is expected to be sealed at the end of the year.
Mr Hui said he was unfazed by the government's tightening measures on property development.