Mandarin Oriental has confirmed that The Excelsior, Hong Kong will close on 31 March 2019 so that the site can be redeveloped.
The hotel, which opened in 1973, is situated on a prime commercial waterfront site in the Causeway Bay district of Hong Kong where the group has approval for the development of a mixed-use commercial building with a Gross Floor Area of some 63,500 sqm.
The redevelopment is expected to take up to six years to complete and cost some US$650 million. The redevelopment will be funded through a mix of external debt and cash reserves. A decision on financing is expected to be made in due course, with the majority of costs not expected to be incurred until 2023. The Excelsior site is mortgage free. Approximately US$15 million of costs related to the redevelopment are estimated to be incurred in 2019, which the group will fund from cash reserves.
Once completed, the new building is expected to generate significantly higher, and more stable, cash flows with less ongoing capital expenditure compared to a renovated hotel.
James Riley, Group Chief Executive of Mandarin Oriental Hotel Group, said "The Excelsior has always been an important and much-loved hotel in the group's portfolio. We will ensure there are plenty of opportunities over the next few months for local and international guests to visit the property and celebrate 45 years of memories. The hotel has enjoyed a long and successful history, not least because of the extraordinary service provided by our colleagues on property through the years. The group is committed to ensuring that all Excelsior colleagues are treated fairly, with many to be offered positions in other Mandarin Oriental properties."
Mandarin Oriental currently operates 31 hotels and seven residences in 21 countries and territories. Mandarin Oriental International Limited is incorporated in Bermuda and has a standard listing on the London Stock Exchange, with secondary listings in Bermuda and Singapore. It is a member of the Jardine Matheson Group.
