Update | New World Development sells Hong Kong hotel stakes to Abu Dhabi investor for HK$18.5 billion
Grand Hyatt, Hyatt Regency and Renaissance Harbour View will be injected into joint venture
New World Development (NWD) is selling three of its luxury hotels for HK$18.5 billion into a joint venture with the Abu Dhabi Investment Authority (ADIA) in the biggest hotel deal in Asia in a decade.
The developer and controlling shareholder Chow Tai Fook Enterprise (CTFE) - owned by the family of Cheng Yu-tung - will inject the three hotels, including the flagship Grand Hyatt Hong Kong in Wan Chai, into a newly formed 50-50 joint venture with ADIA, the world's second-largest sovereign fund.
The other two hotels to be transferred to the joint venture are the Renaissance Harbour View in Wan Chai and the Hyatt Regency Hong Kong in Tsim Sha Tsui.
"It is a breakthrough deal for ADIA as it marks its first entry to the hotel market in Asia excluding Japan and Australia," a source said.
The deal tops Cuscaden Partners and Wheelock Properties' purchase of a 58 per cent stake in Singapore's Hotel Properties for US$1.79 billion in April last year.
It is also the second big investment by a Middle Eastern sovereign wealth fund in Hong Kong in the past six months. In October, the Qatar Investment Authority paid HK$4.78 billion for 19.9 per cent of Sogo Department store operator Lifestyle International.
After the completion of the latest deal, ADIA will own a 50 per cent stake in the three hotels, via the joint venture, with NWD's stake reduced to about 23 per cent and CTFE's to 18 per cent.