The owner of the Rosewood Hotels & Resorts chain, along with other hotel assets in Asia, is looking to raise cash—a lot of it. Word is New World Development Co., which acquired Rosewood in the summer of 2011, and owns hotel properties in Hong Kong, including the Grand Hyatt and Hyatt Regency, plans to raise around $800 million-$1 billion by listing its hospitality assets in Hong Kong, The Wall Street Journal reports.
At $1 billion, the IPO would be the biggest in Hong Kong since People's Insurance Company (Group) of China Ltd. raised $3.6 billion in November. The Journal further reports that the conglomerate is considering a separate listing of "certain hospitality assets" of the group, but "no application for the proposed spin-off has yet to be made to the Hong Kong stock exchange."
New World is expected to list the assets in the second quarter at the earliest, people close to the deal told The Journal, adding that the company has engaged HSBC Holdings PLC, Deutsche Bank AG, JP Morgan Chase & Co., BOC International and Standard Chartered Securities to handle the listing.
New World, controlled by billionaire Cheng Yu-tung, has stakes in 16 hotels in Hong Kong, China and Southeast Asia.
New World Development's major hotel projects in Hong Kong are the Grand Hyatt Hong Kong, Hyatt Regency Hong Kong, Tsim Sha Tsui, Hyatt Regency Hong Kong, Sha Tin and Renaissance Harbour View Hotel in Hong Kong.
As part of the Rosewood deal, which New World acquired for $229.5 million, New World bought five luxury hotels, including Manhattan's Carlyle, from Maritz, Wolff & Co. and Rosewood Corp. for about $570 million.
The influx of visitors and soaring property prices have been bullish for the hotel industry in Asia. Shares in hotel operator Regal Hotels International Holdings Ltd., for example, have gained more than 28 percent over the past 12 months.
Such a strong performance is surely welcome news to other hotel operatorslooking to list in Hong Kong, Dow Jones reports. These include Great Eagle, which will seek to raise around $800 million by listing its Langham hotel operations in Hong Kong in the third quarter.
Also, Hopewell Holdings said last month that it planned to list its Hong Kong property unit and had submitted an application to the stock exchange.
Different Direction
The New World news comes on the heels of a story from the South Morning China Post, which examines the shake up of the Cheng family. According to the article, New World Development "conducted a major overhaul of its operations last year to try to recapture its status as one of the city's top three developers in the next five years."
As part of the overhaul, the developer turned to the third generation of its founding Cheng family for leadership. Adrian Cheng Chi-kong, 33, was appointed joint general manager in February last year after the retirement of his grandfather, Cheng Yu-tung, as chairman.
"One of our objectives was to improve our building quality and shorten the development period of our residential projects," Cheng told the SMCP. "We aimed to provide a new living experience for our residents, and conducted many focus group interviews to determine their preferences.
"We also wanted to be innovative in property sales and design. We chose architects who are strong in art and culture to design our project. We wanted to differentiate our product from our competitors."