Mandarin Oriental International Ltd. plans to redevelop The Excelsior hotel in Hong Kong's Causeway Bay district into a commercial mixed-use building with an expected cost of roughly US$650 million.

The waterfront site has approval for a gross floor area of roughly 63,500 square meters.

The hotel, which opened in 1973, will be closed March 31, 2019, following a detailed review of long-term strategic options for the site. The move aims to benefit from the strong commercial property values in Hong Kong and the expectation of a higher yield.

The redevelopment will take up to six years and will be funded with a combination of external debt and cash reserves.

The Hong Kong-based company began exploring possible options, including a sale, for the hotel in June 2017. It later said the offers did not meet its expectations for the HK$30 billion asset.