Frasers opens Beijing property
BEIJING: FRASERS Hospitality opened another service apartment property yesterday, this time in Beijing, amid the rush and celebration of the Olympics.
The property in the central business district was officially opened by Singapore President S R Nathan, although it has been operating since June.
Called Fraser Suites CBD, Beijing, this is the first Chinese property wholly owned by the firm and the sixth of 12 it will manage in China by 2010.
The Beijing property forms part of a mixed development that has offices and shops as well as 357 flats - studios and one- and two-bedroomers.
It was purpose-built by Chinese conglomerate Cosco and could potentially go into a future real estate investment trust (Reit).
A new property typically takes a while to build up its occupancy, though for Fraser Suites CBD, Beijing is fortunate to benefit from the Olympics.
Occupancy is at a high 80 per cent, though daily rates have tripled during the Games. But once the event is over, it is going to be business as usual, said chief executive officer Choe Peng Sum.
Frasers Hospitality, the service apartment arm of conglomerate Fraser & Neave, bought the Beijing property for US$135 million (S$190 million) in 2006 and its value has appreciated on a double-digit basis, said Mr Choe. He would not disclose the current value.
He also said that the firm is aiming to have 10,000 service apartments worldwide by 2010, up from its recently released target of 8,500 units by 2010.
Before the end of the year, it will have opened more properties in places such as Hong Kong, Osaka and Hanoi.
It will be signing more management contracts in China under the Fraser brand, possibly bringing the total number of properties in the country to as many as 20, it said. Like some large hospitality firms, its strategy is to expand largely through management contracts.
While it will look at buying more properties amid the uncertain global economic climate, its plans for a Reit will be put on hold until the market is more stable.
Meanwhile, it will also set up funds and work on developing a more affordable brand called Modena.
The firm is finalising talks to establish a few private equity funds to invest in Asia, said Mr Choe.
Source : Straits Times - 15 Aug 2008
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