Luxury hotel operator Shangri-La Asia has given a vote of confidence to Hong Kong's hospitality industry after outbidding three competitors to win a waterfront site in Hung Hom for HK$2.328 billion.
The Lands Department announced the hotel site, with a potential gross floor area of 672,700 square feet, was awarded to Shangri-La Hotel (Kowloon), a wholly owned subsidiary of Shangri-La Asia yesterday.
Last week, the department said it had received four bids, including one from Sino Land, in the tender for the waterfront hotel site.
'The site sold for a lower than expected price as a hotel is a capital intensive development and requires a longer pay back period,' said Alvin Lam Tze-pun, a director of Midland Surveyors. 'Only a few developers could afford such a project, but it is a large site that commands a Victoria Harbour view and will be suitable for building a deluxe hotel.'
The winning bid was about 14 per cent lower than the market expectation of HK$2.7 billion.
Lam said the site had attracted big players such as Shangri-La Asia group reflecting their optimism in prospects for Hong Kong's tourism industry.
Shangri-La Asia opened its second hotel property, Island Shangri-La in Admiralty 20 years ago. Its first hotel, Kowloon Shangri-La, in Tsim Sha Tsui East was opened in 1981.