Frasers Hospitality – the property arm of mainboard-listed Fraser & Neave – is planning to grow its presence in the emerging markets of China, India and Vietnam.
Revealing this at a news briefing on Thursday, Frasers said it plans to add about 5,000 serviced apartment units to its portfolio over the next two years. It is scheduled to open 10 new properties this year, and another 25 over 2009 and 2010.
Frasers believes there is room for growth in the serviced apartments sector in China, India and Vietnam, and is pumping in US$135 million for a prime property in the Beijing’s central business district. That will be part of the 5,000 units that Frasers is planning to add to its portfolio. About 80 per cent will be held under fee-based management contracts.
Frasers has already opened two developments in Tokyo and Hanoi. Eight more will be launched within the next eight months, mainly in China, including a soft opening for its first apartment units in Hong Kong. The target is to open 25 properties within the next two years.
Serviced residences in most Asian countries account for about 10 per cent of the hotel inventory. Frasers said they see more upside potential in this, especially with increased demand from multi-national corporations.
“I think the outlook for serviced apartments is (great). A lot of companies, instead of sending long-term expatriates there for 3-4 years, they are actually bringing project groups over for maybe 1-8 months, where they’ll start up the project and then fly back. That’s exactly where our market is, and a lot of our properties are seeing 80-90 per cent occupancy,” said Choe Peng Sum, CEO of Frasers Hospitality.
Frasers is also looking at other opportunities in the Middle East, particularly in Abu Dhabi, Qatar, Oman and Kuwait, on top of the recently announced Dubhai and Bahrain.
Frasers has about 3,500 apartments worldwide currently and it expects to have 8,478 apartments by 2010. – CNA /ls
Source : Channel NewsAsia – 3 Jul 2008