Greenland's 19 hotels worth $4.5b could be part of a Reit

Mr David Su (far left), group chairman of Singapore- based Amare Investment Management Group, with Greenland chairman Zhang Yu Liang. Amare struck a deal yesterday to buy the 19 hotels from Greenland.
Mr David Su (left), group chairman of Singapore- based Amare Investment Management Group, with Greenland chairman Zhang Yu Liang. Amare struck a deal yesterday to buy the 19 hotels from Greenland.PHOTO: AMARE GROUP

A group of 19 hotels from China state-owned property giant Greenland Group could be the basis of a real estate investment trust (Reit) listing here.

Amare Investment Management Group, a Singapore-based investment firm, struck a deal yesterday to buy the hotels from Greenland for 21 billion yuan (S$4.5 billion).

At the same time, it is setting up a joint venture with Greenland to manage the hotels, which are operating under contract with such major players as the InterContinental Hotels Group, Starwood and JW Marriott. The parties said the transaction is just a starting point for more real estate to be injected into the company, including some of Greenland's hotels outside China.

If the private collaborations prove successful they have "the interest and desire to list; however this is still subject to regulatory approval", said Mr David Su, group chairman of Amare and the Singapore-based Glory Fund Management Group.

Amare is a special-purpose vehicle set up for the deal.

While Greenland has a Hong Kong-listed subsidiary and the Hong Kong Exchange enjoys superior trading volume, Singapore has a more developed real estate investment trust market, Mr Su added.

The deal is Shanghai-based Greenland's first collaboration with a Singapore company.

Its chairman Zhang Yu Liang told a briefing yesterday: "We are on a proactive drive to expand further both in China and overseas... Singapore with its strong brand name and proven track record is a big plus for us."

The initial batch of hotels is spread over more than 10 Tier 1 and Tier 2 cities, including Shanghai, Nanjing and Xi'an.

Greenland also has hotels in Los Angeles, Sydney and Frankfurt.

While it has projects in Johor Baru, it has yet to develop in Singapore but not for want of trying, Mr Zhang said. The company last took part in a Government Land Sales tender here in August 2014 but the Potong Pasir plot was eventually won by China's MCC Land.

"We are constantly monitoring the market for development opportunities - for hospitality-related property, industrial property, offices. We look forward to joint ventures with Singapore companies in this," Mr Zhang said. He is also interested in large mixed-use projects and would consider completed assets and capital markets collaboration as well, as in the current deal with Amare, he added.

Greenland has total assets of over 500 billion yuan and has invested over 120 billion yuan overseas to date.

Dr Ernest Kan, chief of operations for clients and markets at Deloitte Singapore, said the potential public listing would be positive for capital markets here.

Just 13 initial public offerings took place last year, of which 12 were Catalist listings, he added.

A version of this article appeared in the print edition of The Straits Times on March 12, 2016, with the headline 'Greenland's 19 hotels worth $4.5b could be part of a Reit'. Print Edition | Subscribe