Hongkong and Shanghai Hotels, which owns 10 Peninsula hotels around the world, plans to expand its overseas residential developments for sale in a bid to finance part of its hotel expansion and bolster revenue.
The group aims to include residential developments in London, Yangon in Myanmar, and possibly Bangkok.
“It helps the investment we have with the residential portion that can be for sale,” said Martyn Sawyer, the group director for properties.
These residences would be adjacent to either the group’s existing or future hotel properties, he said.
Among them, the group’s 50-50 joint venture with Grosvenor to develop a hotel-commercial-residential project would be a major one, said Sawyer who is entering his 30th year at the group.
The partnership will redevelop the 1.5 acre site opposite the gardens of Buckingham Palace and overlooking Hyde Park into a mixed-use development, including the group’s first hotel in Britain, The Peninsula London.
“Within the complex there will be some apartments for sale,” Sawyer said, without disclosing the total investment cost.
HSH acquired its 50 per cent interest from the previous owner, Derwent London, for £132.5 million (HK$1.56 billion then) in July, 2013.
Sawyer said the development plans and design have been submitted for planning approval and he expects the project would not be completed until 2020.
In Myanmar, HSH will build an 88-room boutique-size hotel called The Peninsula Yangon on a site that housed the former Myanmar Railway Company headquarters in the centre of Yangon, he said.
There would be a separate residential tower near the hotel which would be for sale.
In Thailand, the group is also looking at the potential of adding a residential tower on a piece of extra land at the back of The Peninsula Bangkok.
“It is purely in the planning stage [in Bangkok]. We will evaluate the possibility of building a residential project there,” he said.
However, due to the political instability in Thailand, HSH may not go ahead with the project, he added.
Sawyer, however, said it would not be a definite requirement for the group to add residential projects close to its Peninsula hotels.
“There are hotel investments we are looking at without residential spaces in it. Each site in each country is different,” he said.
In future, these residential apartments would also be released for sale in Hong Kong, Singapore and on the mainland, he said.
The group’s luxury Peninsula Residence in Shanghai’s Bund area is also offering the remaining units for sale. The development had achieved average transaction prices of 220,000 yuan per square metre.
In C-Suite P3, Sawyer discusses the strategies the firm will adopt to meet the challenges facing Hong Kong’s property market.
Source: South China Morning Post