Frasers Hospitality Will Expand Business in China, India And Vietnam

Frasers Hospitality, undaunted by the uncertain global economic outlook, is pursuing an aggressive expansion strategy in China, India, Vietnam and other markets.
The hospitality arm of Singapore-listed conglomerate Fraser & Neave is a ‘contrarian’ that aims to add about 5,000 serviced apartments over the next two years, despite fears of a global economic slowdown, said its chief executive Choe Peng Sum.

He sees ‘a lot of pent-up demand’ in cities such as Singapore, London and Sydney – where its residences have enjoyed occupancy rates of more than 90 %.

It is also the ‘right time now to get into China’ while growth opportunities are still bright in Vietnam and India, Mr Choe told a media conference yesterday to mark Frasers’ 10th anniversary, as well as to share its expansion plans.

In Singapore, where Frasers already operates two high-end serviced residences, it is planning a third property, but details will be released later, he said.

He added that Frasers has seen a robust 26 % rise in average room rates to about $400 per night for certain units in Singapore.

Farther afield, Frasers is also planning to plant its brand in places such as Edinburgh, Bahrain and Perth.

Noting that ‘growth in Asia and Europe (for extended-stay accommodation) is just starting to take off’, Mr Choe said Frasers expects to expand its portfolio to 8,478 units by 2010.

It will focus on China, India and Vietnam, which have strong long-term growth momentum.

Frasers is targeting new property launches in cities where demand for serviced apartments has been driven up by expatriates working for multinational companies that set up shop in these countries.

In China, where Frasers already has 12 properties in key cities such as Beijing and Shanghai under its brand, the company is looking to grow in other cities such as Chengdu, Nanjing and Tianjin.

As for Vietnam, while skyrocketing inflation poses challenges for the hospitality industry, land prices are now becoming ‘more reasonable’ as land owners are more realistic in pricing. This offers opportunities for Frasers to expand there, Mr Choe added.

India is another key growth market for Frasers, which has seven properties scheduled to be launched there over the next three years.

Frasers is also in talks to set up private equity funds to invest in China, India and South-east Asia.

One Comment

  1. Posted July 9, 2008 at 3:44 am | Permalink

    Rising interest rates and a falling demand may dent the realty market in India. However, the long-term prospects for the sector continue to be good, feels the industry. There are around 21 India-dedicated real estate funds that are raising money in the international market. In the next nine months, nearly $7 billion will be entering the country through various India-dedicated funds. While long-term players are looking at India, short-term players based in the US and Europe, such as the hedge funds and private equity players, are more interested in their local markets.For more view- realtydigest.blogspot.com

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