Partners Group joins JV for record Hong Kong hotel deal

The Swiss global private markets investment management firm has bought into the HK$2.37bn acquisition of the Novotel Nathan Road hotel in Kowloon by JV Hong Kong-based Gaw Capital Partners and CSI Properties.

Partners Group, the Zug, Switzerland-based private markets investment management firm, has become an investor in Hong Kong’s largest single-asset hotel acquisition in more than a decade.

The firm announced today it had completed an investment in the landmark hotel on behalf of its clients and told PERE it completed the transaction at the end of May. It declined to reveal how much capital it had invested.

Its investment comes almost two months after Hong Kong-based private equity real estate firm Gaw Capital Partners and Hong Kong-based private real estate investor CSI Properties agreed to acquire the 389-room, 16-story hotel for HK$2.37 billion (€245.9 million; $305.6 million).

Seller, Chicago-based real estate investment management firm LaSalle Investment Management, said in its announcement then that the sale was the largest single-asset hotel transaction in Hong Kong for more than a decade.

Spokeswoman Anna Hollmann said: “Partners Group sourced this investment opportunity due to the long-standing relationship with local operator Gaw Capital Partners which brings along strong expertise in the retail and hospitality sector.”

Partners Group aims to benefit from the JV’s plans to further enhance the value of the hotel, formerly known as the Majestic Hotel, via the repositioning of its retail component.

Pamela Alsterlind, partner and co-head of private real estate, said in the announcement: “We have identified increased revenue potential for this high-profile property which is strategically positioned in Kowloon’s ‘golden mile shopping district’, a prominent business, dining, shopping and entertainment area. We expect our clients will profit from the cash-flow visibility and the income growth potential of the property given the structural shortage of hotel rooms in Hong Kong.”

“The business plan is to exploit the upside potential through pro-active asset management,” she said.
Partners Group currently manages more than €25 billion of capital invested across its various strategies including private equity, infrastructure and debt as well as real estate.

Gaw Capital invested in the Novotel Nathan Road hotel via its third China-focused opportunity fund, Gateway China Real Estate Fund III, while LaSalle sold the hotel on behalf of its second pan-Asia opportunity fund, LaSalle Asia Opportunity Fund II.