Mandarin Oriental receives proposals

SYDNEYMandarin Oriental International Ltd has received interest from potential buyers of the Excelsior hotel in Hong Kong in what would be a test of the resilience of demand for the city’s commercial real-estate assets that has sent prices soaring.

There were at least five bids for the property valued at HK$30 billion (RM16.1 billion), including a Chinese-backed consortium of Sun Hung Kai Properties Ltd and Hysan Development Co, the Hong Kong Economic Journal reported on Saturday. Mandarin Oriental said last Friday it had received offers while no decision had been taken on a sale. Sun Hung Kai and Hysan did not reply yesterday to emails seeking comment sent outside office hours.

The proposals will form the basis “for further consideration of the company’s strategic options,” according to a statement from the company. No assumption should be made regarding whether the property will or will not be sold, Mandarin Oriental said.

Mandarin Oriental said in June it was testing the market for a potential sale of the property on the waterfront overlooking Victoria Harbour in Hong Kong’s Causeway Bay district in light of “current strong commercial property valuations in Hong Kong”. The government has approved redevelopment of the site for a commercial building with a gross floor area of 684,000 sq ft (63,546 sq m), according to Bloomberg Intelligence.

“Robust investment demand for Hong Kong office space, driven by record-breaking land sales, could prompt landlords to sell their commercial properties” in the second half, Patrick Wong, an industry analyst with Bloomberg Intelligence, wrote in May.

Hong Kong hotels will struggle to capture high-end, transient Chinese tourists amid rising new supply over the next 20 years, Bloomberg Intelligence analyst Margaret Huang said in a report in June. — Bloomberg