World Trade Centre Association in Los Angeles, California declared that Shenzhen New World Group has purchased Marriott Hotel with 60 million dollars, and was to invest more 1.3 million dollars to perfect the hotel.
Though neither of Shenzhen New World Group and Marriott Hotel has formally announced the price, Alan Lay, the consultant of Atlas Hotel Group, indicated that Shenzhen New World Group had paid 60 million dollars for the hotel which includes 469 rooms. When Marriott Hotel’s business was moving well in 2007, Namtso capital group, who is interested in purchasing, had quoted a high price of 11.5 million dollars.
Since Oct.2008, as deterioration of the economic condition, American Hospitality’s revenues began to decline linearly. Last summer, the GM capital lender confiscated Marriott Hotel at the downtown of Los Angeles.
Built in 1983, the hotel with 14 stories had luxury like Sheraton, but it was lack of necessary maintenance due to insufficiency of funds in recent years. Lay said, actually it was agreeable with current trends in Hospitality for Shenzhen New World Group acquiring the hotel at the half price in 2007, since the price of the hotel has also gone down 50%.
Shenzhen New World Group Purchased Marriott Hotel in L.A.
Rey said, “In the long term, it’s a good bargain to purchase Marriott Hotel at this price. However, the Shenzhen New World will also have to invest greatly in the refurbishment of hotel to make it in line with existing standards.” Shenzhen New World Group plans to invest 13 million U.S. dollars in repair cost, which includes updating its electricity and water supply systems to meet the benchmarks of modern energy efficiency.
This is the first acquisition of the California assets by China’s Shenzhen. The New World Group, based in Shenzhen, is continuing to seek other acquisition opportunities in the United States.
“We do witness more and more Asian investors to be interested in the investment in the West Coast’s gateway cities in U.S.,” Rey said, Asian investors recently purchased the W Hotel in San Francisco and L’Oreal Vettel Beverly Villa Hotel.
Shenzhen Post Rebecca Contributes to the Story.
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