Swire Properties Sells Miami Hotel in $174M Deal as Asset Sales Continue

Swire Properties last week announced the sale of a Miami hotel in a $174 million deal which brings the unit of Hong Kong conglomerate Swire Pacific’s stack of asset disposals to nearly $1.9 billion since July of last year.

The blue-chip developer’s latest disposition was the 352-key East Miami hotel, which represents the hospitality element of its $1.05 billion Brickell City Centre mixed-use complex in the southern Florida financial hub of Brickell.

The 5-star hostelry had been Swire’s second hotel asset in Miami, and has now been acquired by a joint venture between funds managed by Honolulu-based Trinity Real Estate Investments and New York-headquartered Certares Real Estate Management, the developer said in a press release. The company continues to hold a 75 percent stake in the Mandarin Oriental Miami.

Cathay Pacific, which is among Swire Pacific’s biggest businesses, recorded a $973 million loss in the first half of 2021, and with Hong Kong’s border reopening on indefinite hold, expects to continue losing more than $128 million monthly for the rest of this year, according to the conglomerate’s interim report.

With the airline business in trouble, Swire Properties has now liquidated nearly $1.9 billion in investment properties and other assets over the last 16 months, according to Mingtiandi’s tally.

Cashing Out in Miami

The sale of East Miami means that Swire Properties has now disposed of its holdings in five of the six buildings in the 5.4 million square foot (501,676 square metre) Brickell City Centre complex in the last sixteen months.

Opened in 2016, East Miami spans a gross floor area of 218,000 square feet, and is part of the mixed-use complex that occupies a 504,017 square foot site. The hotel, which shares branding with Swire properties in Hong Kong and Beijing, was designed by award-winning architecture firm Arquitectonica, together with Studio Collective and Clodagh Design.

Trinity and Certares are paying the equivalent of around $494,318 per key for the luxury hotel with those representing rooms ranging in size from 300 to 1,800 square feet.

“This deal marks one of the largest hotel transactions in South Florida since the start of the COVID-19 pandemic, and it’s the first out of our inaugural commingled fund,” noted Sean Hehir, Trinity’s managing partner, president and CEO.

As for Swire Properties, which first established its Miami presence in 1979, the company said the transaction is expected to provide capital for investment in future developments.

Sunshine State Sell-Off

With the sale of East Miami, Swire retains only the 500,000 square foot retail component of Brickell City Centre, with residential and office portions already having found new owners.

These property sales included nearly all remaining units at Reach and Rise, the residential portion of Brickell City Centre’s first phase, which also features two office towers and an open-air shopping centre.

In May, KAR Properties and Fortune International Group paid over $65 million to purchase 81 condo units remaining in Reach and Rise — the two towers constituting the residential component of the complex — reported the South Florida Business Journal. Following that sale, Swire had just two condo units remaining in the complex, according to its interim report.

The condo close-out had been preceded just over one year ago by Swire’s sale of the two office towers in the project. Affiliates of Northwood Investors paid a combined $163 million for Two and Three Brickell City Centre, reported the South Florida Business Journal.

With most of the completed assets in Brickell City Centre now sold off, Swire is readying the 80-storey One Brickell City Centre supertall, as its next Miami project, and has at least two more towers planned in the city. The company also owns a site known as North Squared, which lies opposite Brickell City Centre.

Asian Assets on the Market

During the same period that it was paring back its Miami holdings, Swire Properties has also raised some quick cash selling assets closer to home.

In March of this year the developer announced the S$293 million ($218.8 million) disposal of all 20 units at Eden, its luxury residential project in Singapore’s Orchard Road area.

In its home city of Hong Kong, Swire Properties had sold off 645 parking spaces in its Taikoo Shing complex by 10 August, which it said in its interim report was largely responsible for a 20 percent increase in its underlying profit attributable shareholders for the first half of the year, which brought those earnings to $578.1 million.

Before the year began, Swire Properties was already raising some cash with its sale of the Cityplaza One office tower in Quarry Bay to a consortium led by Gaw Capital, Schroder Pamfleet and Manulife for a price of HK$9.8 billion in a deal which closed in the final days of 2020.

Compared to the HK$7.9 billion profit in the first half of 2019, Swire’s holding company suffered losses attributable to shareholders of HK$7.7 billion in the first six months of 2020, followed by a HK$792 million loss in the same period this year.

In May, Swire Properties’ chairman Merlin Swire resigned from his position after a turbulent three-year stretch in Hong Kong, driven by social unrest and the pandemic which continues to keep borders closed. Swire remains a director of the company.

Though revenue from Swire Properties’ hotel businesses saw some improvement in the first half of 2021, increasing to HK$427 million from HK$274 million in the same period last year, the figure still lagged behind 2019’s performance, where the company earned HK$706 million in hospitality revenue the first six months of the year.

Note: This story has been updated to show that Swire Properties achieved a 20 percent increase in interim underlying profit in the first half of 2021, which brought that figure to $578.1 million and that East Miami is the company’s second Florida hotel project. An earlier version of this story had stated that the company had achieved a $578.1 million increase in profit, and that East Miami was its first hotel property in the US. Mingtiandi regrets the errors.