Macau’s luxury hotel, THE 13, has initiated an open bidding process for its sale, seeking to offload the property for HK$2.4 billion (US$307 million). Handled by Jones Lang LaSalle (JLL), the bidding process has attracted interest from approximately two dozen potential buyers. This move comes amidst THE 13’s tumultuous journey, marked by bankruptcy, construction delays, and financial woes.
Background and Vision:
THE 13 was conceived as an opulent haven by its former Chairman, Stephen Hung, poised to cater to the VIP gaming segment in Macau during the early 2010s. Envisioned as an ultra-luxurious hotel boasting 66 VIP gaming tables, it aimed to capitalize on the flourishing VIP market. However, the project encountered numerous setbacks, leading to a compromised opening in September 2018. Despite its extravagant design, THE 13 debuted without gaming facilities and with several rooms incomplete, all while incurring a staggering cost of US$1.6 billion.
Financial Struggles and Bankruptcy:
The troubles for THE 13 intensified as its parent company, South Shore Holdings, faced mounting financial pressures. South Shore sought voluntary liquidation of its subsidiary, New Concordia Hotel Limited, the entity owning THE 13, in response to creditor demands. The company revealed its insolvency in October 2021, triggered by a lender’s demand for the repayment of outstanding loans amounting to HK$3.28 billion (US$423 million). This financial strain culminated in the cessation of all operations.
Leadership Crisis:
The leadership upheaval further compounded THE 13’s woes. Long-time Chairman, Peter Coker Jr., who had succeeded Stephen Hung, resigned from his position in October 2022. His departure followed a series of setbacks, including legal troubles. Coker’s arrest in Thailand in January 2023, stemming from charges of stock market manipulation by the US Department of Justice, underscored the tumultuous journey of THE 13 under his tenure.
The Current Situation and Sale Process:
Jones Lang LaSalle (JLL) is overseeing THE 13’s sale, aiming to attract potential buyers amidst its troubled history. The asking price of HK$2.4 billion (US$307 million) reflects the property’s distressed status. However, any prospective buyer must consider substantial investments to rectify the hotel’s unfinished rooms and bring it up to regulatory standards. The bidding process, set to conclude on 5th April, marks a pivotal moment for THE 13’s future trajectory.
THE 13’s journey from a visionary project to a troubled asset highlights the challenges of the hospitality industry, particularly in high-stakes markets like Macau. As it embarks on the sale process, the hotel faces a critical juncture that will determine its fate. Whether it can attract a buyer willing to invest in its revival remains uncertain, underscoring the complexities inherent in salvaging distressed assets within the luxury hospitality sector.