A little-known private developer from Ningbo is buying the Shanghai Hilton, the city's first five-star hotel, for US$150 million, an official newspaper reported.
Yu Guoxiang, chairman of Ningpo Yong Hong Real Estate, is taking a 100 per cent stake in the hotel from Hong Kong Xin Yi Hotel Investment, the Economic Observer said. The hotel and Yong Hong declined to comment.
Xin Yi, a company set up with mainland money in Hong Kong in 1983, invested US$90 million to build the Hilton. At that time, it was the tallest building in the city at 144 metres and 43 floors, and a symbol of the city's modernisation.
While all the capital came from Xin Yi, it had as its partner the Shanghai Jinjiang Group, the city's biggest state-owned hotel chain, with whom it set up a joint company in January 1985, of which Xin Yi provided all the registered capital of US$7.8 million. Jinjiang brought to the venture its connections to the city government and knowledge of the tourist market.
In 1988, the two invited Hilton to run the hotel and persuaded it to take a 5 per cent share. Hilton later withdrew its capital, leaving Xin Yi as the sole owner.
Industry sources say that, in recent years, the Hilton has had annual revenues of more than 100 million yuan (HK$93.7 million), with a high occupancy rate. It occupies a prime site in the Puxi area, close to the east-west expressway that cuts through the city, leading to Hongqiao airport at one end and the Bund at the other.