GuocoLand Sells The Guoman Shanghai for RMB1.44bn – US$204m
Main Photo: The Guoman Hotel, Shanghai
Date: May 2020
Location: Daduhe Road, near Changfeng Park, Shanghai, China – the hotel is part of the Guoson Centre complex.
Name: The Guoman Shanghai
No. of Keys: 442
Seller: Shanghai Xinhaolong Property Development Co., a unit of GuocoLand has agreed to sell the 26-story Guoman Hotel in Shanghai, along with a set of parking spaces. GuocoLand’s sale of its Shanghai hospitality asset comes more than a decade after the company opened the five star hotel in July 2010.
Buyer: A subsidiary of Shanghai-based developer Dahua Group – Shanghai Zhengjiu Industrial Co. The sale also includes a 256-space parking garage. As part of the deal, the China subsidiary may also sell up to another 44 underground parking spaces to the buyer.
Dahua, founded in 1988 are serious property developers (within the Top 50 in China) and owners of the Holiday Inn Shanghai Jinxiu. They entered the Australia market in 2014 and now have 12 projects in Sydney, Melbourne and Brisbane.
The property developer is expected to record a net gain of $90.6 million with the transaction.
One of Southeast Asia’s largest developers has defied the COVID-19 crisis to sell a hotel property in Shanghai’s Putuo district at a mark-up of nearly 65 percent over its net book value, according to an announcement to the Singapore stock exchange on Friday.
GuocoLand is controlled by Malaysian billionaire Quek Leng Chan’s Hong Leong Company,
GuocoLand developed the hotel as part of the company’s Guosun Centre mixed-use development north of Suzhou Creek in western Shanghai, may also, at its discretion, sell another 44 parking units to Dahua at a consideration of RMB 160,000 each.
Dahua sealed the all cash deal by making an initial payment of RMB 288.2 million, with another three instalments set to follow on an unspecified timetable. GuocoLand said that it had already received RMB 1.4 million as earnest money against purchase of the additional parking units, but had not yet committed to following through on that element of the transaction.
The hotel is part of the same Changfeng Eco Business District masterplan as the Guoco Changfeng City office project, which the company plans to complete next year. In its statement GuocoLand said that it would use the proceeds of the transaction for general working capital, including repayment of debt.
The Guoman hotel forms part of the 492,272 square metre Guoson Centre mixed-use development that includes the Guoson Mall, offices for lease and strata-title small office-home office element, along with serviced apartments.
The Guosun Centre complex, along with the Tanjong Pagar Centre in Singapore, Damansara City in Kuala Lumpur, is among GuocoLand’s largest mixed-use developments.
Price: RMB 1.44bn – US$204m
Price per Key: Not including the parking facility, around RMB 3.26 million per room in the Guoman Hotel – US$461,538.
THPT Comment: Interesting price in this Covid-19 era, at such a significant price above book value….maybe the recovery is really happening in Shanghai.
First Seen: Mingtiandi
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