China’s Dajia weighs US$1b sale of 3 US luxury hotels: sources

DAJIA Insurance Group is exploring a sale of some of its luxury hotels, seeking to cash in on surging travel demand even as rising interest rates make financing real estate transactions more expensive.

Dajia, which took over most of the operations of China’s Anbang Insurance Group, is tapping advisers for a potential transaction, said people familiar with the process, who asked not to be named because the matter is private.

The hotels that could be sold include the Montage Laguna Beach in California and Four Seasons resorts in Jackson Hole, Wyoming, and Scottsdale, Arizona - a trio of properties that could bring in more than US$1 billion, one of the people said.

Representatives for Dajia in New York and Beijing didn’t immediately respond to a request for comment. 

The hotels are well-known in the lodging industry, both for their high-end locations and the recent saga surrounding their ownership. 

The properties were transferred to Dajia when the Chinese government restructured Anbang following that company’s collapse. In 2019, Anbang agreed to sell a group of 15 hotels to South Korea’s Mirae Asset Management for US$5.8 billion. That transaction, which included the 3 properties that Dajia may now sell, fell through in 2020 as the Covid-19 pandemic hobbled the hotel industry.

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Now, Dajia is exploring a smaller transaction at a moment when lodging demand is surging in the US, especially at lavish resorts like the Laguna Beach, Jackson Hole and Scottsdale properties. Across all US hotels, revenue per available room increased 26 per cent last week from the same period in 2019, before the pandemic, according to data from STR cited by Raymond James & Associates.

At the same time, rising interest rates and uncertainty in capital markets could make it harder for a buyer to line up financing for a transaction. In May, Dajia halted efforts to refinance a separate hotel portfolio, citing market volatility.

Dajia refinanced the Laguna Beach, Jackson Hole and Scottsdale hotels last year. BLOOMBERG