Shimao Property Holdings Ltd, a Shanghai-based property developer listed on the Hong Kong Stock Exchange, and Starwood Capital Group, a U.S. private investment firm, have announced plans to jointly establish a new hotel joint venture in China.
Under the terms of the agreement, Shimao will hold a 51% stake in the joint venture, while Starwood will own the remaining 49%. The venture plans to focus on developing and operating news hotels in China, according to a company announcement.
"The joint venture will focus on maximizing the benefits that can be derived from the intangible assets, consolidating the group's sustainable commercial development while ensuring profitability, and providing the most effective support for partners," said Tyrone Tang, a general manager at Shimao Hotels and Resorts, a subsidiary of Shimao Property.
"We believe that a combination of Shimao Hotels and Resorts' strong management and comprehensive understanding of the Chinese hospitality industry, together with Starwood Capital Group's financial strength and global lodging experience, will create win-win results," Tang added.
Starwood will provide financial and operational support for Shimao Hotels and Resorts' future hotel expansion plans in China and the Asia Pacific region. The two companies together will prioritize generating returns for third party owners, and develop recognizable hotel companies in China.
Founded in 1991, Starwood focuses on global real estate, energy infrastructure, oil and gas sectors. It currently has US$52 billion of assets under management. The firm has previously invest in around 2,900 hotels globally, and it is increasingly focused on investment opportunities in Asia, especially in China.
"We believe that this partnership will benefit from Starwood Capital Group's global investment expertise and world-class marketing and revenue management capabilities, together with Shimao's impressive domestic development track record, strong brand recognition and expansive partner network," said Kevin Colket, managing director and head of Hotels for Asia at Starwood.
"As one of the world's fastest-growing economies, with a large and growing middle class with increasing disposable income, China represents an exciting market for us, and we are looking forward to meeting Chinese consumers' rapidly evolving lodging needs through this partnership."
Founded in 2009, Shimao Hotels and Resorts operates 20 international and homegrown luxury hotels in China, and has partnered with a number of international hotel management companies including Starwood Hotels & Resorts Worldwide (Marriott), Hyatt Hotels&Resorts, InterContinental Hotels Group and Hilton Hotels and Resorts.