Creditors in aggressive push to sell 2 Hong Kong hotels amid banks’ drive to cut losses

Receivers and agents of the Sheraton Hong Kong Tung Chung Hotel and the Four Points by Sheraton have expressed confidence in finally finding a buyer for the dual-branded complex – which together make up Hong Kong’s third-largest hotel by room numbers – as creditors move to dispose of the asset.
Sole agent Savills is holding a formal tender that is expected to close on August 31 for the 1,219-room property on Lantau Island, near the Tung Chung MTR station and the Hong Kong International Airport.
The complex, operated by Marriott, was seized after mainland Chinese developer Shimao Group failed to sell it despite slashing the asking price to about HK$4.5 billion (US$574 million) in late 2024, from at least HK$6 billion a year earlier.
“This is a genuinely rare offering – dual-branded with Marriott standards, all under one roof,” said Raymond Lee, CEO at Savills Greater China, during a site visit on Tuesday.
“During previous rounds of EOI [expressions of interest], the property attracted a number of serious, well-capitalised buyers, and we have been in substantive discussions with several of them,” Lee said. “The receivership appointment of AlixPartners brings clarity and decisiveness to the process. With an asset of this calibre, I am expecting the transition of ownership will be confirmed very soon.”

With a gross floor area of around 610,000 sq ft and completed in 2020, the property was estimated to cost more than HK$10,000 per square foot to develop. No floor price had been set for the tender, according to Savills.
The latest attempt to sell the asset comes as banks increasingly prioritise controlling losses over delaying them.
Stricter capital requirements, tougher regulatory treatment of troubled loans and growing scrutiny from rating agencies have raised the cost of holding distressed commercial property exposure.
As a result, lenders are becoming more willing to accept discounted sales, appoint receivers and take charge of disposal processes when borrowers fail to present credible deleveraging plans.
“Creditors are more realistic … on the realisation of this asset,” said Una Ge, partner and managing director at AlixPartners.
“For this asset, the receivership is offering two things: first is to send a signal to the market that the creditors are ready and really want to dispose of this asset, and there’s good momentum we have been seeing in this market,” Ge said. “And under a receivership, there is a cleaner transfer of the title under the Conveyancing and Property Ordinance.”
The hotels recorded a blended occupancy rate of about 85 per cent in the first quarter.
They also house one of Hong Kong’s largest event venues, featuring a 13,300 sq ft column-free grand ballroom, function rooms and an outdoor garden, making them a destination for weddings and meetings, incentives, conferences and exhibitions – commonly known as MICE – events across the region.
Despite the disposal process, operations remain uninterrupted, with busy bookings for the venues.
Savills and the receivers plan to hold roadshows in the coming months to “bring the opportunity directly to investors across the globe,” said Godfrey Cheng, deputy senior director, investment CEO office, at Savills Hong Kong.
Cheng said even with the US Federal Reserve signalling a possible interest rate increase later this year, prospective buyers were expected to “take a long-term view” rather than engage in speculation.
“The type of buyer [for these hotels] is not subject to financing constraints,” he said, adding they had cash on hand and were hunting for good deals in Hong Kong to diversify portfolios.
“I think [investors] would also be global because it’s rare to have an international brand hotel [up for sale] in Hong Kong,” Cheng said. “Lots of Southeast Asian investors are paying close attention to Hong Kong.”