Mandarin Oriental To Sell Half Of Its Equity Investment In Its New York Hotel

Hamilton, Bermuda: December 21, 2006 - Mandarin Oriental International Limited announced today that its wholly owned entity, Mandarin Oriental New York Inc., has entered into an agreement to sell half of its investment in Mandarin Oriental, New York reducing the Group's interest in the hotel from 50% to 25%. The Group will continue to manage the hotel under a long-term contract. At the same time, the Group's 50% partner in the hotel, Apollo Real Estate and Related Companies, will sell the majority of its equity to the same buyer. Completion is expected in February 2007.

The buyer of the 73% interest in the hotel is Istithmar Columbus Centre Holding Company LLC, which is owned by Istithmar Hotels, a wholly owned subsidiary of Istithmar PJSC, which is 100% owned by Dubai World which in turn is wholly owned by the Government of Dubai. The 248-room Mandarin Oriental, New York is valued at US$340 million for the purposes of the transaction. The carrying value of half of the Group's 50% investment in the hotel as at 30th June 2006 was US$14.5 million.

On disposal of its 25% interest, the Group will receive after tax proceeds of US$29 million with a post tax gain of approximately US$16 million, which will be recognized in 2007. As part of the transaction, the Group will also receive repayment of its outstanding mezzanine loan to the hotel of US$40 million. The total proceeds of US$69 million will be applied towards the Group's general corporate purposes, including pursuing its development strategy.

As part of the overall transaction, the terms of the Group's management contract will be enhanced and the long-term tenure of the Group's management will be significantly increased.

Mandarin Oriental, New York, which opened at the end of 2003, has achieved significant recognition and awards for its outstanding service and facilities, including the Mobil 5 Star which was awarded earlier this year. "Mandarin Oriental Hotel Group is delighted by the performance of the hotel so far and we are looking forward to working closely with our new partner on the future success of the property," said Edouard Ettedgui, Chief Executive of Mandarin Oriental Hotel Group.

Mandarin Oriental Hotel Group is the award-winning owner and operator of some of the world's most prestigious hotels and resorts, currently operating 21 luxury hotels with a further 11 under development in Riviera Maya-Mexico and Hainan Island-China (2007), Barcelona, Boston and Grand Cayman (2008), Dallas, Chicago, Las Vegas, Macau, Marrakech and Turks and Caicos (2009). In total, Mandarin Oriental now operates, or has under development, almost 9,000 rooms in 18 countries with 13 hotels in Asia, 13 in the Americas and six in Europe and North Africa. Mandarin Oriental International Limited is a public listed company and a member of the Jardine Matheson Group.