Receivers to sell indebted Shimao’s 2 Hong Kong hotels to Malaysian developer

Receivers of the Sheraton Hong Kong Tung Chung Hotel and the Four Points by Sheraton have sold the dual-branded complex, which together comprise the city’s third-largest hotel by room count, for HK$2.7 billion (US$344 million), Shimao Group announced on Thursday.

In a filing to the Hong Kong stock exchange, the distressed mainland Chinese developer said the buyer was Oceanfront Hong Kong Limited.

Oceanfront is owned by, among others, investment vehicles associated with ParkCity Group, a Malaysian property developer, which also has projects in Vietnam, receiver AlixPartners and Marriott, which operates the complex, said in a separate statement.

According to Companies Registry records, Oceanfront’s directors are Joseph Lau, who holds a Malaysian passport, and Keoy Soo Lik, who holds a Hong Kong ID card. It was incorporated on September 29. Lau is the CEO of ParkCity.

Shimao said the sale was expected to be completed by the end of the year, with the net proceeds to be used to partially pay off a loan taken out by the group in 2020.

“This will reduce the overall indebtedness of the group and strengthen its financial position, consistent with the group’s ongoing efforts to address its liabilities in an orderly manner,” Shimao said.

Savills arranged the bidding process for the 1,219-room property on Lantau Island, near Tung Chung MTR station and Hong Kong International Airport.

The complex was seized by receivers after Shimao failed to sell it despite slashing the asking price to about HK$4.5 billion in late 2024 – down from at least HK$6 billion a year earlier.

The property, completed in 2020 and registering a gross floor area of around 610,000 square feet, was estimated to cost more than HK$10,000 per square foot to develop. Savills said no floor price had been set for the tender.

The hotels recorded a blended occupancy rate of about 85 per cent in the first quarter of this year.

They also house one of Hong Kong’s largest event venues, featuring a 13,300 square foot column-free grand ballroom, function rooms and an outdoor garden, making them a destination for weddings and big events.