Cheung Kong and Hutchison snap up prime property for well below forecast
A consortium controlled by Li Ka-shing has agreed to pay $1.93 billion for the four-star Kowloon Hotel complex in Tsim Sha Tsui, lower than the market had anticipated.
The sale price, which includes the 736-room hotel, a 40,000-square-foot shopping arcade and $660 million in debt, valued the hotel at $1.6 million per room. Analysts had projected the sale would fetch up to $2.5 million per room.
The sale also valued the shopping arcade at about $92 million, compared with analysts' estimates of $430 million.
A statement from the hotel's owner, Hongkong and Shanghai Hotels, said the company 'understood that the purchaser intends to continue running Kowloon Hotel subsequent to acquisition'.
The consortium - a 50-50 venture between Cheung Kong (Holdings) and sister company Hutchison Whampoa - said it was attracted to the strong commercial value of the retail-hotel complex and its prime location.
A Hongkong Hotels spokeswoman declined to comment if the consortium offered the highest bid, citing confidentiality of the sale and purchase agreement.