Hotel group Century City eyes expansion in the US and Europe
Diversification into US and Europe is driven by soaring land prices in Hong Kong. The group is also building Hong Kong’s largest airport hotel to be opened in 2020
Century City International Holdings – which is building a HK$5 billion airport hotel, Hong Kong largest airport hotel in Chek Lap Kok – is eyeing expansion opportunities in the US and Europe as part of its diversification plan.
The diversification is driven by the difficulty to replenish land in Hong Kong as mainland rivals are willing to paying shockingly high price for government sites, says vice chairman Poman Lo Po-man.
The group is in talks with a potential partner to build a retail-cum-hotel-cum-residential development with a gross floor area of 420,000 square feet in New York.
No further details can be disclosed at the moment.
“It is not we do not look at Hong Kong, but we cannot just set our eyes on Hong Kong,” said Lo.
Lo, 37 , is the vice chairman of Century City International, which holds 62.3 per cent in Paliburg Holdings, that in turn has a 67.9 per cent stake in Regal Hotels International Holdings.
Regal has a 74.6 per cent stake in Regal Real Estate Investment Trust, which owns eight Regal and three iclub Hotels operating in Hong Kong.
The group has businesses spanning from property, hotels to aircraft leasing.
Lo rejected suggestions that the group is less aggressive compared other major developers when it comes to overseas expansion, saying ,“Once the right opportunities arise, one project alone may be equivalent to the combined capital outlay of several.”
“We just do not want to enter a bidding war with rivals as it will increase risks,” said Lo, who is the thrid generation of the Lo family, which controls Great Eagle Holdings through a trust.
The family is currently locked in a court battle over the role of HSBC as trustee of the family business.
In late 1999, the group disposed a substantial part of the Regal hotel chain’s ownership and management interests in North America.
“We had once managed 100 hotels in the US, but sold them to pursue [targets with] better investment returns such as [those in] Hong Kong. We absolutely have the expertise to manage hotels ourselves, we are just waiting for an opportunity to take off,” she said.
In Hong Kong, the group won the contract for the development of the new airport hotel for HK$2.19 billion in February. Inclusive of construction and other expenses, she said the total investment cost would be HK$5 billion.
“The new airport hotel will be managed by the soon-to-be announced new brand,” she said, adding that it will be completed in 2020.
The group has 12 hotels – nine have opened for business while three are under construction – with more than 6,500 rooms operating under the Regal brand for the high-end market, and iclub catering at business travellers.
“The positioning of the new brand will be in the mid-range between targeted customers by Regal and iclub. This is a more stylish and casual brand,” she said.
The 12-storey airport hotel has a 362,746 sq ft of gross floor area and is located at site A1a of Skycity at the Hong Kong International Airport.
The project is part of the first phase of the 25-hectare Skycity project, which also comprises offices and retail, dining and entertainment facilities. Skycity is located at the north-eastern corner of the airport island, surrounded by Terminal 2, AsiaWorld-EXPO and SkyPier.
“Skycity’s retail space is bigger than the whole of Causeway Bay. Our hotel will certainly benefit when it open its door for business in 2020,” she said.