IHG Sells Hong Kong Hotel to Gaw-led Group

HONG KONG—InterContinental Hotels Group PLC, the world's largest hotelier, said Friday it had sold the Intercontinental Hong Kong to a Gaw Capital-led investors consortium for US $938 million. IHG CEO Richard Solomons says the sale, expected to close in the second half of 2015, “completes the disposals of our major owned assets.”

IHG will continue to manage the property under a 37-year contract, with three 10-year extension rights. The new ownership group, collectively known as Supreme Key Limited, plans to refurbish the 37-year-old hotel beginning in 2017.

Calling the Intercontinental Hong Kong “an exceptional property” and “an iconic hotel in our portfolio,” Solomons notes that since IHG's formation in 2003, “we have disposed of almost 200 hotels for gross proceeds of almost $8 billion, and have returned over $10 billion to our shareholders. Looking forward, we will continue to focus on the disciplined execution of our winning strategy for sustainable high quality growth.”

Situated on the Kowloon waterfront, the 503-key property opened in 1980 as the Regent Hong Kong. IHG acquired it from Hong Kong-based New World Development Co. in 2001 for $371 million, Bloomberg Business reported Friday.

IHG expects to make a $700-million pre-tax profit on the sale. A decision on returning funds to shareholders from these proceeds, alongside those received from the $366-million sale of InterContinental Paris - Le Grand, will be announced with the company's preliminary results in February 2016.