(Yicai) Oct. 17 -- China Jinmao Holdings Group has put up for sale the real estate giant’s five-star hotel property in the popular beach resort of Sanya on the southern tropical island of Hainan, seeking to raise at least CNY1.85 billion (USD254 million) from its disposal.

Jinmao's board has approved the listing of Jinmao Sanya, the unit whose sole asset is the Hilton Sanya Resort and Spa, on the Beijing Equity Exchange, the Hong Kong-based builder announced on Oct. 15. The sale includes creditor's rights worth about CNY58.5 million (USD8 million).

Jinmao said this is a good time to sell the nearly 20-year-old hotel, which has 492 rooms, at a reasonable price to generate cash flow and improve its financial situation. The company will use the proceeds for future investments and to supplement working capital, it added.

Jinmao is not the only Chinese developer opting to sell hotel assets to shore up its finances. Country Garden Holdings, Shui On Land, Financial Street Holdings Group, Macrolink Culturaltainment Development, Overseas Chinese Town, China Vanke, and others have all offered to sell hotel assets since the beginning of last year.

“Over the past couple of years, high-end hotels have generally underperformed, and their owners, including real estate developers, have been under cash flow pressure," Wei Changren, founder of travel-focused news outlet Jinglve, told Yicai. “Selling these assets is likely a strategy to improve their investment portfolios.”

Even though China's tourism sector is picking up, the hotel market faces hurdles due to oversupply, particularly luxury hotels with high operating costs. For example, US chain Marriott reported a 4.2 percent fall in second-quarter revenue per available room in China from a year ago.

Editors: Tang Shihua, Futura Costaglione