Hong Kong-based private equity real estate firm Gaw Capital Partners has led a consortium of investors to acquire the InterContinental Hotel in Hong Kong for $938 million.
The InterContinental Hotels Group sold its full ownership of the hotel to Supreme Key, which is owned by separate account investors advised by Hong Kong-based Gaw Capital Partners and affiliate Pioneer Global Group.
The transaction, which is expected to close in the second half of 2015, is Gaw Capital’s first separate account investment in Asia. As part of the deal, Gaw Capital Partners will also commit to an additional capital improvement budget for refurbishing the sprawling 503-room property.
“We are delighted to have led the successful acquisition of this iconic Hong Kong property. We intend to fully leverage our extensive experience in hotel management to ensure that the InterContinental Hong Kong remains a world class location,” said Goodwin Gaw, chairman and managing principal of Gaw Capital Partners.
The InterContinental Hotels Group will retain a 37-year management contract for the landmark hotel located on the Kowloon waterfront, with three 10-year extension rights giving an expected contract period of 67 years. The group will make a $700 million pretax profit from the sale, according to a company statement.
Kenneth Gaw, managing director of Pioneer Global Group and president and managing principal of Gaw Capital Partners added: “Pioneer Global Group has long been an active investor in hotels, especially in SE Asia, including the Pullman Hotel G Bangkok, Pullman Hotel G Pattaya, and the Strand Hotel in Yangon, Myanmar. The acquisition of the InterContinental Hong Kong will be the first hotel investment for Pioneer Global Group in Hong Kong. I am confident that this iconic property with its commanding presence on the harbor front and its star studded restaurants will continue to be one of the leading hotels in Hong Kong and the world.”
Earlier this year in June, the firm also launched its first sector-specific commingled real estate fund, a vehicle aimed at investments in logistics properties in China, for which it had a fundraising target of $300 million. Gaw Capital already raised the targeted equity from investors to acquire a number of assets in the development pipeline of a Shanghai-based logistics firm called Vailong.
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