Hongkong and Shanghai Hotels has announced a significant financial setback concerning its ambitious Peninsula Yangon project. The company will record an impairment provision amounting to 160 million Hong Kong dollars, mirroring the remaining book value of the project as of the end of last June. This move signals the complete write-off of the hotel's development in Myanmar's old capital, Yangon, amid prolonged political instability following the military's seizure of power four years ago.
The Peninsula Yangon project, managed by Hongkong and Shanghai Hotels, the esteemed operator behind the luxurious Peninsula Hotels chain, was initially launched with an original cost of $130 million. The development aimed to transform the former colonial-era Myanmar Railway headquarters into a premium hotel. However, the project's progress has been at a standstill for four years due to the country's challenging political climate.
Located in the heart of Yangon, the project's strategic location was intended to capitalize on the city's rich historical backdrop. Yet, the seizure of power by Myanmar's military from its democratically elected government has cast a long shadow over the development. The ongoing political unrest has severely impacted the project's prospects, leaving its future uncertain.
The impairment provision of 160 million Hong Kong dollars completely matches the project's remaining book value as recorded at the end of last June. This decision underscores Hongkong and Shanghai Hotels' strategic reassessment of its investments in light of the stalled development and bleak status of the Peninsula Yangon project.
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