Chinese insurer buys New York luxury hotel for over US$230 mln

February 09, 2015 16:03
The 114-room super-luxury property features 15,000 pieces of crystal stemware and 17 chandeliers from France’s Baccarat factory. Photo: Internet

China's Sunshine Insurance Group Co. has agreed to buy the super-luxury Baccarat Hotel in New York for more than US$230 million, the Wall Street Journal reported.

The price for the Midtown Manhattan property, at more than US$2 million per room, breaks the previous record set by the Plaza Hotel, a New York landmark that was sold in 2012 to India’s Sahara Group for US$2.04 million a room, according to hotel data tracker STR Analytics.

Barry Sternlicht’s Starwood Capital Group LLC built the luxury hotel and high-end condominium project with Tribeca Associates, a New York real estate developer, the newspaper said. Starwood, which acquired French crystal maker Baccarat in 2005, will continue to manage its namesake hotel, which will open next month.

The 114-room property features 15,000 pieces of crystal stemware and 17 chandeliers from France’s Baccarat factory. Suites are expected to fetch up to US$18,000 a night.

Cash-rich Chinese are taking advantage of new rules that allow them to invest up to US$1 billion without seeking government approval, up from US$100 million before last year’s changes.

They look at luxury hotels, especially in major global capitals, as long-term investments that can provide steady income in a period of low interest rates, not to mention the prestige the properties confer on their owners.

“Chinese insurers are buying for 50 or 100 years, and they are not worried about value going down in markets like New York,” Ryan Meliker, a hotel analyst for investment bank MLV & Co., was quoted as saying.  “It’s a great place to park money long term.”

China’s Anbang Insurance Group Co. in October agreed to pay US$1.95 billion to Hilton Worldwide Holdings Inc. for the famed Waldorf-Astoria on New York’s Park Avenue. Also last year China property investor Dalian Wanda Group Co. invested US$900 million in a Chicago skyscraper with a luxury hotel. Chinese investors also have bought hotels in Sydney, Washington and Los Angeles in the past year.

Real-estate broker JLL estimates that Chinese companies will spend more than US$5 billion on overseas hotel investments this year, up from US$920 million last year and US$130 million in 2012.

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