Asia’s wealthiest businessman is collecting Mandarin Oriental New York City hotel – and at a discounted rate.
Mukesh Ambani – a power, technology and retail entrepreneur with a net worth of about $ 93 billion – has taken a controlling stake of $ 98 million in five-star assets, according to a government filing.
Ambani’s Mumbai-based conglomerate Reliance Industries, which owns luxury hotels in London and Mumbai, took a 73 percent stake in the luxury space, effectively worth $ 134 million.
The 248-room hotel in Columbus Circle and over Central Park was worth $ 340 million in 2007. Steve Quazo of The Post first reported that it was quietly placed in the block in September.
Sources told The Post at the time that Mandarin Oriental sales were expected to be less than $ 100 million in the current, hard-to-sell market for New York hotels.
Like other luxury hotels in the Big Apple, Mandarin Oriental also suffers from the lack of permission for international travelers to come to the US and is now shunned by the fast-moving Omicron variant. Domestic leisure travel to the city was also hit during the epidemic.
According to Reliance Industries, the hotel will have revenues of just $ 15 million in 2020, compared with $ 115 million in 2018 and $ 113 million in 2019.
The hotel is owned by the Cayman Islands-based firm which is controlled by the Investment Corporation of Dubai, which retains a 26.6 percent stake in the property, with Reliance Industries leading the acquisition for the “same valuation” of its majority shareholding. , The company said in a statement.
“This business represents a lower capitalization rate on pre-Covid’s earnings, and a bet on improved profitability when the epidemic travel restrictions are behind us,” said Jonathan M. Bullock of New York University. Sean Hennessy, a professor at the Tisch Center of Hospitality, told The Post. .
“We have seen this first in prompting buyers to acquire hotels when 30 per cent of the hotels are available. [their] Past prices and valuations. “
Ambani’s company is best known for focusing on energy, technology and retail, but said it is looking to expand its small hospitality footprint. According to the LOVEBYLIFE Billionaire Index, the mogul is listed as the 11th richest person in the world, with a fortune of $ 92.9 billion.
Vijay Dandapani, president of the New York City Hotel Association, previously told The Post that the bet looks promising in Mandarin Oriental and the brand should be in Manhattan as the property has a long-term contract with the Asian hotel chain.