https://arab.news/pjzp6
- Islamabad is pushing for privatization of loss-making state entities as part of the conditions set by the IMF
- Pakistan PM’s aide says they will make a decision about the hotel after finalization of a new financial adviser
ISLAMABAD: Pakistan Prime Minister’s aide on privatization Muhammad Ali on Monday said the demolition of the Pakistan International Airlines-owned Roosevelt Hotel in New York to build a skyscraper is “not yet confirmed,” adding they are also looking at other options relating to the establishment.
The Roosevelt Hotel, a century-old Manhattan property owned by the Pakistan International Airlines (PIA) through its investment arm, is considered one of Pakistan’s most valuable foreign assets. Islamabad is pursuing a joint venture model rather than an outright sale, seeking a redevelopment partner to maximize its long-term value as part of a broader privatization drive.
The South Asian country says it expects the privatization of the Roosevelt Hotel to be completed this year. The 1,015-room hotel, located near Grand Central Terminal, Times Square and Fifth Avenue, was closed in 2020 due to heavy losses but has since been used intermittently, including as a temporary migrant shelter.
Islamabad is considering the option of razing the storied landmark and build a skyscraper in its place, and the government is keen on a joint venture in which Pakistan will contribute the land and the partner will bring in the equity, Bloomberg reported last week. The other option is to retain the hotel if it made sense economically.
“(The) demolition is not yet confirmed,” Ali told Arab News, when asked about reports of the iconic building being dismantled. “We are also looking into option of continuing with hotel and will decide everything in the next couple of months after finalization of our new financial adviser.”
Last month, global real estate firm Jones Lang LaSalle (JLL) resigned as financial adviser for the hotel’s partial sale, citing a conflict of interest due to client involvement. The government has since accelerated efforts to appoint a new adviser and proceed with the joint venture model approved by the federal cabinet.
The government is expected to finalize a new adviser later this month after receiving bids from seven groups, including Greysteel, B6 Real Estate Advisers and Kirkland & Ellis LLP; CBRE, Morgan Stanley, Paul Hastings and Goldman Harris LLC; Ankura, Bank of Punjab, Baker McKenzie and Orr, Dignam & Co.; Savills, MACRO, Cirtin Cooperman & Company LLP, Hogan Lovells, and Mohsin Tayebaly & Co.; Alvarez & Marsal Private Equity Performance Improvement Group LLC, Proskauer, and FGE Ebrahim Hosain (FGE-EH); Citi Bank, Cushman & Wakefield, Proskauer Rose LLC, and HaiderMota & Co.; and Newmark, Herbert Smith Freehills Kramer (US) LLP, and Peregrinvest LLC.
Ali said the financial adviser will be hired in the “next 3 weeks.”
“We might continue with the hotel,” he said. “It depends on the hotel’s feasibility and final recommendation of our new finance adviser.”
Acquired by the Pakistan International Airlines Investment Limited (PIA) in 1979, the hotel occupies a full city block on Madison Avenue and 45th Street. Over the past two decades, successive Pakistani governments have floated plans to sell, lease, or redevelop the property, but no proposal has advanced beyond early-stage planning.
Prime Minister Shehbaz Sharif’s government is making its most ambitious effort in years to restructure or sell state-owned companies to fulfil a key requirement of the International Monetary Fund’s (IMF) $7 billion loan program. An IMF mission is currently in Pakistan to review the government’s end-June 2025 performance and a successful review would fetch it about $1 billion loan tranche.
In July, the Cabinet Committee on Privatization (CCOP) approved the transaction structure for Roosevelt Hotel under a “Joint Venture model with multiple options.”
“This option is aimed at maximizing long-term value for the country, while ensuring flexibility, multiple exit opportunities, and minimizing future fiscal exposure,” the country’s Privatization Commission (PC) said at the time.
A PIAIL official privy to the matter said the commission was evaluating the bids.
“After evaluation, the technical adviser would conduct a study in the light of which the commission will take a decision and inform the government which would then decide on the fate of this hotel with the approval of federal cabinet,” the official, who requested anonymity, told Arab News.
Operations at the Roosevelt Hotel were suspended in 2020 following steep financial losses during the COVID-19 pandemic. In 2023, Pakistan entered a short-term lease with the City of New York to use the property as a temporary shelter for asylum seekers, generating more than $220 million in projected rental income. That agreement ended in 2024 and no new revenue stream has since been announced.
In June, Ali had said the question that how much money the hotel would ultimately bring in and its overall valuation depend on the type of transaction structure adopted.
“Depending on what sort of structure you have, how much risk you take, how much effort the government puts in, we can make a lot of money from this asset,” he had said.