CDL Hotels International will bid for a hotel at the new airport but otherwise has no other big plans for Hong Kong because of the low yield on hotel investment in the territory. Singapore, on the other hand, promises the company a six to seven per cent growth in turnover because of its acquisition of the Harbour View Dai-Ichi Hotel - approved at yesterday's extraordinary general meeting. The company has barely slowed its global shopping spree for hotels, expanding its portfolio of hotels from five in 1989 to 34 last year. Executive director Gan Khai Choon said the returns from building a hotel in Hong Kong was only a few per cent, much less than for office development. 'We put in our name along with other bidders for an airport hotel, but it's a development that'll take some five years to finish,' Mr Gan said. CDL has only one hotel in Hong Kong, the Hotel Nikko Hong Kong. Its overseas hotels span eight countries. A room in Hotel Nikko is valued at HK$5 million but a room in the newly acquired Dai-Ichi Hotel cost about S$297,000 (about HK$1.64 million). Despite the shortage of hotel rooms in Hong Kong, CDL has not considered strengthening its local presence. 'We have no other plans in the Hong Kong hotel industry at the moment,' Mr Gan said. 'The low return does not warrant the investment.' The company's placement of 306 million new shares at HK$4.05 last week for $1.22 billion in proceeds would help reduce its gearing ratio of 40 per cent by two-thirds to about 13 per cent. The firm intends to build a cash bank for new acquisitions. Responding to criticism that the placement could dilute earnings per share, Mr Gan said it was the best possible deal it could have worked out. 'Obviously not everyone will be happy,' he said. 'Shareholders won't like it either in the case that they had to pay for a rights issue. 'But $4.05 per share is already a good price.' He said CDL could earn about HK$60 million in interest a year with the proceeds, given an interest rate of five per cent. General manager Lawrence Yip Wai-lam said the portfolio of hotels was diverse enough to cushion the firm from any particular risks.