Content area
Full Text
Foreign investment capital is flowing into Manhattan's luxury hotels--as evidenced by last week's sale of the Plaza--driven by a rising potential for profit and the limited supply of properties.
For now, many of these Asian and Middle Eastern investors appear content to remain distant from daily hotel operations.
"We're seeing people who are cash-rich investing in the luxury marketplace, but they're hands-off on operations," says Keith Kefgen, president of Hospitality Valuation Services Executive Search, in Mineola, L.I.
However, there are indications that the deep-pocketed owners may become more actively involved in management, sharpening the competition in the luxury sector by upgrading their properties.
Other investors may follow. European and Japanese hotel chains, as well as the Westin and Doubletree groups, reportedly are combing Manhattan for appropriate investments.
Singapore investor Kwek Leng Beng is a notable example of the trend. Last week. he and Saudi Arabian Prince Alwaleed Bin Talal Bin Abdulaziz Al Saud agreed to assume Donald Trump's debt on the Plaza in return for 80% ownership. They also have agreed to invest $28 million in renovations.
Mr. Kwek has so far kept an arm's length from operations and hired outside management firms for the two Manhattan hotels he already owns, the Millenium Hilton and Hotel Macklowe. But now his hotel investment company is planning to set up...