Mandarin Oriental shares plunge after lacklustre bids push its sale of Excelsior hotel off the market
Hotel operator withdrew the sale, valued at HK$30 billion, after bids failed to meet its expectations.
Mandarin Oriental International withdrew the sale of its Excelsior hotel in Hong Kong’s Causeway Bay, an iconic property on a prime waterfront site approved for conversion into offices, after receiving bids that failed to meet its expectations.
The property on Plot 1, the very first parcel of land sold when Hong Kong became a British colony in 1841, was expected by valuers to fetch more than HK$30 billion (US$3.8 billion), testing a record in the world’s most expensive property market.
No single bidder had met Mandarin’s expectations, the hotel operator said in a statement released before trading hours today, without disclosing the number of bids received. It would consider a review of all options, including those that may result in a redevelopment of the property into a commercial building, Mandarin said.
“There’s a gap between the price expectation of the bidders and the seller,” said Vincent Cheung Kiu-cho, Colliers International’s deputy managing director for Asia valuation, who values the 848-room hotel at between HK$25 billion and HK$27 billion.
Mandarin’s shares plunged by as much as 32 per cent on the Singapore exchange to US$1.89 after the announcement, their largest intraday tumble on record.
Mandarin decided to put the 44-year old hotel on the market in June, a month after a government sale of the Murray Road site in downtown Central set a world record for the most expensive commercial property by square footage.
The site of the Excelsior, which has been approved by zoning authorities for redevelopment into commercial offices, was estimated by surveyors at between HK$24 billion and HK$34.2 billion, or between HK$35,000 and up to HK$50,000 per square foot, with a total gross floor area of 684,000 square feet (63,545 square metres).
