Nearly two years after Gaw Capital led an investment consortium that acquired Hong Kong’s Intercontinental Hotel for $938 million, Pioneer Global Group, which is controlled by the city’s Gaw family, has agreed to invest $118.4 million to acquire an additional 20 percent stake in the 503-room Kowloon landmark.
Following the transaction, Pioneer Global will own 30 percent of the project company holding the Intercontinental, according to a statement to the Hong Kong exchange by the listed firm. Pioneer and Gaw Capital had both been part of the investor consortium which acquired the hotel in 2015, with Korean sovereign wealth fund KIC said to have been the major player in the deal, according to analysts familiar with the deal who spoke with Mingtiandi.
The July 2015 acquisition of the hotel in Kowloon’s Tsim Sha Tsui area is one of the largest single asset transactions to date for Gaw Capital, the family-run private equity real estate investment firm headed by Goodwin Gaw. The company has rapidly become a pivotal player in Asia’s real estate investment universe and just one month ago reportedly closed on $1.3 billion in investment for its Gaw Capital Real Estate Fund V Asian investment vehicle.
IHG Goes Asset Light as Gaws Hunt Hotel Opportunities
According to the stock market announcement, Pioneer is acquiring its shares from Panorama International Trading Limited in return for $16.4 million in cash and an agreement to take over a $102 million shareholder loan previously owed by the BVI company. Following the deal, Pioneer will also have control of two of the five seats on the board which controls the Intercontinental.
The Gaw Capital-led group had purchased the Kowloon Hotel from the Intercontinental Hotel Group as the hospitality giant behind the Holiday Inn and Crowne Plaza brands turned its focus to managing, rather than owning properties.
The new owners have announced their intention to rejuvenate the 37-year-old structure starting this year in a process expected to last 18 months, according to statements by the company at the time of the original purchase transaction.
Gaws Follow Their Taste for Hotels
The Gaws have an affinity for hospitality deals, having purchased hotels in Asia and the US, and the family operates the Hotel G hospitality group.
Gaw Capital Partners now includes 25 properties in its hospitality portfolio and has exited another six projects, according to the company’s website, including venues in Bangkok, Pattaya, Hong Kong, Macau, San Francisco, Suzhou, Shenzhen and Beijing.