HONG KONG: Defaulted Chinese developer Shimao Group Holdings Ltd has slashed the asking price for a Sheraton-branded hotel property near Hong Kong’s airport by a quarter, according to a person familiar with the matter.

Shimao, once one of China’s biggest developers, is looking to sell the 18-story property in Tung Chung for at least HK$4.5 billion (US$579mil), the person said, asking not to be identified discussing a private matter.

Known for developing five-star properties as landmark projects, Shimao opened the hotel in 2020.

The asset, which comprises the Sheraton and Four Points by Sheraton Tung Chung, was first put on the market in March 2023 with an asking price of HK$6bil, according to two people familiar with the matter.

The property, with more than 1,200 rooms, is the second-largest hotel complex in the city by room inventory, according to real estate agent Jones Lang LaSalle Inc.

Shimao didn’t offer a comment when contacted by Bloomberg News.

The move is the latest effort by Shimao to cash in on its offshore assets as it works on its restructuring, after defaulting in 2022.

High interest rates and a weakening economy in China have spurred fire sales on some Hong Kong properties.

At least HK$2.1 trillion has been erased from real estate values in the city since 2019, according to an analysis by Bloomberg Intelligence in June.

Hui Wing Mau, the billionaire founder of the developer, earlier this year cut the price of an office floor in Hong Kong’s The Centre by nearly 23% from what it was listed at in 2023.

The Shanghai-based builder released its debt restructuring plan in March and further sweetened it in October.

The hotel property may form part of an asset package as a supplemental credit enhancement for Shimao’s broader debt restructuring plan, according to a filing to the Hong Kong stock exchange.

Creditors holding 80.72% of in-scope debt principal have signalled their support for the proposed restructuring programme, according to a company filing in December.

Earlier this month, a Hong Kong court dismissed a liquidation case against Shimao.

The developer plans to seek a court order early next year to hold a creditor vote on the plan. — Bloomberg