Langham Hospitality Investments Limited (Stock Code: 1270) (incorporated in the Cayman Islands with limited liability) has been established primarily to own and invest in a portfolio of hotels, with an initial focus on completed hotels in Asia. The initial asset portfolio will comprise of:
- The Langham, Hong Kong;
- Cordis, Hong Kong; and
- Eaton HK.
The Langham, Hong Kong and Cordis, Hong Kong are both High Tariff A hotels and Eaton HK is a High Tariff B hotel under the classification set out by Hong Kong Tourism Board, with High Tariff A being the highest category and High Tariff B being the second highest category. Each of the Hotels is located on the Kowloon peninsula in Hong Kong, a vibrant commercial and leisure hub which offers a variety of activities ranging from shopping, food and beverage, and entertainment to cultural attractions. The Hotels are also located near well-connected transportation hubs in Hong Kong allowing guests to enjoy access to other leisure and business districts in Hong Kong.
The Group's objective is to provide Holders of Share Stapled Units with the potential for sustainable long-term growth of such distributions and enhancement in the value of the hotel portfolio. The Group intends to accomplish these objectives through optimising the performance and enhancing the overall quality of the Hotels and identifying and pursuing hospitality asset acquisition opportunities through implementing various investment and business strategies.
Active asset management strategy:
The Group intends to supervise proactively the Master Lessee (in conjunction with the Hotel Manager) and the Hotel Manager in order to seek to maintain and improve the quality and the value of the Hotels and achieve organic growth. The Hotel Manager will also seek enhancement opportunities, such as further improving the Hotels’ food and beverage outlets, refurbishing rooms and adding new facilities to increase room and non-room and non-guest revenue and maximise the operational performance of the Hotels.
Acquisition growth strategy:
The Group intends to identify and pursue hospitality asset acquisition opportunities arising from trends in the hospitality industry and to evaluate future acquisition opportunities focusing on the following investment criteria:
- Total return requirements: The Group will seek to acquire hospitality assets which the Directors believe will be total return enhancing to the Holders of Share Stapled Units from a yield and/or capital growth perspective and taking into account regulatory, commercial, political and other relevant factors.
- Geographical locations: The Group will assess the location of hospitality assets that become available and the potential for business growth in the relevant markets.
- Strong fundamentals, organic growth and asset enhancement potential: The Group may also acquire hospitality assets that the Directors believe have the potential for the Hotel Manager to add value and drive higher RevPAR through repositioning and rebranding, improving hotel operations and management or other asset enhancements.
Capital and risk management strategy:
The Group intends to maintain a strong balance sheet and an appropriate gearing ratio.