Hotels selling for upwards of $1 billion is on an upward trend. First The Cosmopolitan, then the Waldorf Astoria and now, maybe, the InterContinental Hong Kong. The hotel's owner, IHG, is reportedly seeking at least $1 billion for the property.
UK-based IHG has, according to sources, hired Jones Lang LaSalle to find a buyer, and is aiming to complete a sale by March.
The luxury InterContinental Hong Kong has 503 rooms, so a sale of the hotel for $1 billion would mean a per key price of around $1.9 million. In contrast, the final sale price of the Waldorf Astoria netted seller Hilton Worldwide Holdings around $1.5 million per key.
IHG has been on a roll selling real estate, continuing the asset-light approach many hotel companies are pursuing today. Last December, IHG found a buyer for the Barclay in New York, and, in August, it was reported that it had found a buyer for its Le Grand hotel in Paris.
All of this has been going on under the continued spectre of a possible sale of IHG—at least if one shareholder had its way.
IHG had a stellar third quarter. In the U.S., RevPAR was up 8.7 percent in the third quarter and 7.5 percent in the first nine months, the strongest quarterly U.S. RevPAR growth in 8 years. Specific to the InterContinental Hong Kong, its RevPAR rose 5.4 percent in the third quarter on increased business from tour groups and corporate events, said IHG CFO Paul Edgecliffe-Johnson.
The 17-story Hong Kong hotel opened in 1980 as the Regent Hong Kong hotel, and was previously owned by Hong Kong billionaire Cheng Yu-tung’s New World Development Co., which sold the hotel in 2001 for $346 million.