KUALA LUMPUR (Oct 22): A financially-distressed Chinese property developer will sell its massive hotel complex in Hong Kong to Malaysia’s ParkCity Group for some RM1.4 billion.

Sheraton Hong Kong Tung Chung Hotel and the Four Points by Sheraton will be sold together with their business to Oceanfront Hong Kong Ltd owned by investment vehicles tied to the privately-held developer known for Desa ParkCity township, according to an exchange filing. The sale is expected to be completed by the end of 2026.

“The sale price was well below the property’s valuation, meaning the banks would also take a loss on the disposal,” the South China Morning Post reported, quoting Glen Ho, Deloitte’s Asia-Pacific contingency planning and insolvency leader.  

The high-end five-star Sheraton Hong Kong Tung Chung Hotel has 218 rooms and suites, while Four Points by Sheraton caters to the budget-conscious with its over 1,000 guest rooms, according to their websites. Together, they have the third biggest room inventory in the city, according to real estate firm Savills appointed by Shimao to sell the assets.

The complex has total gross floor area of about 610,000 square-feet, making it the largest hotel in the area directly adjacent to Hong Kong International Airport. 

A tender for the dual-branded property, placed into receivership amid default on multiple loans and bonds by Shimao, was launched in June and closed on Aug 31. The sale also included T-Bay, Tung Chung’s newest community hub of restaurants, bars and shops.

The bidding process was “highly competitive” and the price tag for the sale was concluded after “arm’s length negotiations”, Shimao said in the filing to the Hong Kong Exchange.