New York Post: Asia’s richest man takes controlling stake in Mandarin Oriental NYC hotel for $98M
By LISA FICKENSCHER
January 10, 2022 12:19 PM
Asia’s richest businessman is scooping up the Mandarin Oriental New York City hotel — and at a discount price.
Mukesh Ambani — an energy, tech and retail magnate who has an estimated net worth of nearly $93 billion — took a controlling stake in the five-star property for $98 million, according to a government filing.
Ambani’s Mumbai-based conglomerate, Reliance Industries, which also owns luxury hotels in London and Mumbai, took a 73 percent stake in the luxury venue, effectively valuing it at $134 million.
The 248-room hotel located at Columbus Circle and overlooking Central Park, had been valued at $340 million in 2007. It was quietly put on the block in September, as The Post’s Steve Cuozzo first reported.
In the current, distressed market for New York hotels, a Mandarin Oriental sale had been projected to fetch as little as $100 million, sources told The Post at the time.
Like other luxury hotels in the Big Apple, the Mandarin Oriental has been suffering as international travelers have not been allowed to come to the US and are now staying away because of the fast-moving Omicron variant. Domestic leisure travel to the city has also taken a hit during the pandemic.
The hotel had revenues of just $15 million in 2020, compared with revenues of $115 million in 2018 and $113 million in 2019, according to Reliance Industries.
The hotel has been owned by a Cayman Islands-based firm controlled by the Investment Corporation of Dubai, which will retain a 26.6 percent stake in the property, which Reliance Industries has offered to acquire “for the same valuation” used for the majority stake investment, the company said in a statement.
“The transaction represents a low capitalization rate on pre-covid earnings and appears to be a bet on improved profitability once pandemic travel restrictions are behind us,” Sean Hennessey, a professor at New York University’s Jonathan M. Tisch Center of Hospitality told The Post.
“We’ve seen this before where buyers are prompted to acquire hotels when they’re available at 30 percent of [their] prior prices and valuations.”
Ambani’s company is better known for its focus on energy, tech and retail, but said it was looking to expand its small hospitality footprint. The mogul is listed as the world’s 11th richest person, according to Bloomberg Billionaire’s Index, which lists his wealth at $92.9 billion.
A bet on the Mandarin Oriental looks promising as the property has a long-term contract with the Asian hotel chain and the brand needs to be in Manhattan, Vijay Dandapani, president of the Hotel Association of New York City, previously told The Post.