Hyatt on the Bund, Shimao Group's third luxury hotel in Shanghai, officially opened on Friday. [Photo:Shanghai Daily]

 

Shimao Group, a leading real estate player in the Chinese mainland owned by billionaire Xu Rongmao, said yesterday in Shanghai it will increase its five-star hotel portfolio in China from three to about 20 within three years.

 

It also plans to list its hotel business, probably in Hong Kong, by 2010.

 

"By 2010, we wish to expand our hotel presence to nearly 20 with total investment exceeding five billion yuan (US$667 million)," said Xu, chairman of Shimao Group and also the second-richest Chinese mainlander named by Forbes magazine. "As planned, we will open more hotels in cities with robust economic growth such as Beijing, Nanjing, Wuhan and Fuzhou."

 

He made the remarks at the official opening of Hyatt on the Bund, the group's third luxury hotel in the city yesterday.

 

The two-billion-yuan hotel, located at the northern end of the Bund, has two towers with a total of 631 rooms, all with spectacular views of the Huangpu River.

 

At present, the group's three hotels, including ones in downtown Nanjing Road Pedestrian Mall and suburban Songjiang District, have a combined 1,700 rooms, accounting for one-tenth of the city's total five-star room capacity.

 

Meanwhile, Hyatt Hotels & Resorts, manager of the new hotel, said it plans to open 16 new hotels in the Asia Pacific region over the next three years, with 12 of them in China.

 

"China, which already has the most Hyatt hotels outside North America, is an engine of growth with significant strategic importance to the Hyatt group," said Edward Tai, area vice president China, from Hyatt Hotels & Resorts. "We hope to grow our portfolio by four to five hotels a year on average over the coming years."

 

Shimao Group, which has a land bank of more than 20 million square meters in the country covering residential, hotel and commercial properties, announced last month a major restructuring plan aimed at growing its mainland business.

 

Shimao Property Holdings Ltd said on October 23 in a statement to the Hong Kong Stock Exchange that it plans to inject 100 percent interest in nine commercial property project companies, as well as Beijing Shimao Tower and approximately 750 million yuan cash into Shanghai Shimao Co Ltd, in exchange for shares.

 

The restructuring, still waiting approval from both companies and regulatory authorities, will enable Shimao Property to indirectly own a 64 percent stake in Shanghai Shimao.

 

The transaction will enable Shanghai Shimao to acquire ten commercial properties at various stages of development located in Shanghai, Beijing, and provinces of Jiangsu, Zhejiang, Liaoning and Anhui, with an aggregated gross floor area of four million square meters.

 

After the transaction, expected to surpass 8.3 billion yuan, Shimao Property will primarily run residential properties and hotels, while Shanghai Shimao will focus on the development and operations of commercial property projects, according to the statement.

 

 

(Shanghai Daily November 17, 2007)