Frasers to invest in China, India

Emerging markets are a part of its expansion plan

Frasers Hospitality, Asia’s second-biggest serviced-apartment operator behind CapitaLand’s Ascott Group, is in talks to set up private equity funds to invest in China, India and South-east Asia after delaying its planned share sale.

The company, which expanded its portfolio eight-fold to 3,287 apartment units in the past decade, is raising funds for new developments including markets such as Vietnam and Indonesia, said Frasers’ chief executive Choe Peng Sum.

Said Mr Choe: “A lot of people are still interested in Vietnam. We think China and India are a very good counter to what’s happening with subprime. There’s a slowdown, but there’s still a gravitation towards the emerging markets.”

Frasers Hospitality, a unit of Singapore’s Fraser & Neave, is raising funds as it seeks to more-than-double its portfolio to more than 8,000 apartments in the next three-to-four years. The company, which plans to add nine properties this year, said its share sale has been delayed by at least a year as the benchmark Straits Times Index fell 14 per cent this year.

Frasers said on its website that 90 per cent of its guests are from multinational companies in industries such as banks, oil and gas, and engineering. The company has properties in Asia, the Middle East and Europe, and plans to open new apartments in Bahrain, Dubai and Chengdu in China in the next two years.

“If the economy is slowing down, then the travel gets curtailed for a little bit and growth plans get deferred a year or two, so that’s a sector that may be affected more than other sectors,” said Mr Kurt Roeloffs, Asia chief executive officer of RREEF Alternative Investments, which manages 55.6 billion euros ($117.8 billion) globally.

China and India are expected to expand amid the possibility of a world recession, the International Monetary Fund said two months ago. China will expand 9.3 per cent this year, slower than a previous forecast of 10 per cent, the IMF said. India’s growth is estimated to be 7.9 per cent this year, down from an earlier prediction of 8.4 per cent, it added. – Bloomberg

Source : Today – 25 Jun 2008

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