The Landmark Mandarin Oriental

Named by Travel + Leisure as one of the world’s greatest hotels, the Landmark Mandarin Oriental offers an exclusive, luxury retreat in the heart of Hong Kong’s business and fashion district.

As part of KGG’s multi-phased renovation of the Landmark at the heart of Hong Kong’s Central district, the Mandarin Oriental comprises 101 guest rooms and 12 suites, the renowned Amber restaurant, the MO bar, and a state-of-the-art spa with indoor pool. The hotel occupies the first 14 floors of the Edinburgh Tower.

KGG’s transformation, created in collaboration with interior designer Adam Tihany, included the planning of a bespoke entry experience and the design of a suspended, three-story exterior wall of folded vertical glass panels that envelopes the hotel entrance and new retail podium along Queen’s Road Central, unifying the complex’s disparate elements and giving them a distinct and compelling identity.

Issuer:

KGG Group

Token Symbol:

KGG

Funding Type:

Common Equity

Property Type:

Hospitality

Location:

Hong Kong Island, HK SAR

Project Type:

Value Added

IRR Objective:

19.6%

Dividends:

7.8%

Target Equity Multiple:

250%

Estimate Hold:

5 Years

$35,750,000 65% Funded
Invest
Sample Return Objectives
Sample Investment Amount $50,000
Average Annual Payment Objective to Investor $3,900
Total Annual Payment Objective to Investor $19,493
Distribution Objective to Investor Upon Exit $96,249
Total Net Earnings Objective to Investor $65,741
Average Annual Cash on Cash 0.0%<>5.4% <>7.7% <>11.5% <>14.4%
Issuer Fees
Acquisition Fee & Renovation Fee (% of purchase price) 1.00%
Debt Placement Fee (% of total loan proceeds ) 0.25%
Property Management Fee (% of total revenue)(1) 3.0%
Exit Objective Summary
Sale Price Objective(1)  $1,637,067,640
Transaction Costs Objective(2) (34,741,350)
Total Proceeds from Sale Objective 1,602,326,290
Outstanding Principal Balance Upon Sale Objective (1,047,473,900)
Net Proceeds at Sale Objective $554,852,390

Sources

Senior Debt (64.4% loan-to-cost (LTC)) $825,000,000
Mezz Debt (80.0% LTC) 200,000,000
Equity Invest Equity (21.4% of total equity) 55,000,000
3rd Party Equity (16.9% of total equity) 4,350,000
Sponsor Equity (61.7% of total equity) 158,407,500
Total Sources $1,281,907,500 

Uses

Purchase Price $955,000,000
PIP/Renovation Budget 252,500,000
Diligence, Legal, Financing and Closing Costs 36,732,500
Franchise Costs 2,750,000
Issuer Acquisition and other fees 9,550,000
Placement Fee 1,925,000
Equity Invest Admin Fee 200,000
Working Capital and Reserves 13,000,000
Lender Fees 10,250,000
Total Uses $1,281,907,500
Issuer Experience
Year Established 1993
Number of Principals 3
Number of Employees (including affiliates) 2,500+
KPF — Hotel Assets Owned (hotels) 29
KPF– Hotel Assets Owned (keys) 6,299
Geographic Footprint for Hotels Owned 13
KPF — Hotels Under Management (hotels)
45
KPF — Hotels Under Management (keys)
9,101
KPF Previous Financings with Equity Invest 3

PPM
Investor Package
Issuer Overview
Issuer Track Record