Hong Kong's Leadon Investment eyes Canada's SilverBirch Hotels & Resorts

The DoubleTree by Hilton Hotel West Edmonton is managed by SilverBirch Hotels & Resorts (DoubleTree by Hilton Hotel West Edmonton)

As it retools its real estate investment strategy, the British Columbia Investment Management Corp. is planning to sell its portfolio of Canadian hotels, reportedly valued at more than $1 billion.

According to sources, the "pension fund giant" has entered into an agreement to sell SilverBirch Hotels & Resorts, including its 26 hotel assets and management operations, to private investor group Leadon Investment Inc. Affected properties include Delta hotels in Toronto, Calgary, Victoria and Halifax.

Leadon Investment was founded in September 2016 with a legal registered office in British Colombia. According to the Globe and Mail, the company originated in Hong Kong, which would explain why some of the property sales were reviewed under the Investment Canada Act, which oversees foreign acquisitions valued at more than $600 million. 

If Leadon is, indeed, based in Hong Kong, this deal would only be the latest in a string of Asian businesses acquiring Western hospitality assets. Last spring, InnVest Real Estate Investment Trust, which has a portfolio of 109 hotels in Canada, was acquired by Bluesky Hotels & Resorts, a Canadian company with Hong Kong backers, for $2.1 billion, including debt. At the time, reports compared the purchase to Anbang's $6.5-billion acquisition of Strategic Hotels and Resorts and abandoned $14-billion bid for the Starwood hotel chain. Later, reports found that Bluesky was itself affiliated with Anbang. Bluesky said it would use the company as a platform for further investment. 

Ten years ago, BCIMC paid $1.2 billion for the Canadian Hotel Income Properties Real Estate Investment Trust, acquiring 7,700 rooms in 32 hotels under the Delta, Radisson, Marriott and Hilton brands. In early 2015, the pension fund signed a $168-million deal with Marriott to sell the brand and management of Delta hotels in Canada, while retaining ownership of some Delta-branded buildings. BCIMC’s hotels that are not now managed by Marriott are managed by Silver Birch.

The SilverBirch deal is expected to be completed in the coming weeks, subject to closing conditions and other government and brand partner approvals. The process is still under way and not assured to be completed.