Frasers Hospitality, the serviced apartment arm of the Fraser and Neave group, wants to expand in Singapore but may be put off by high land prices and construction costs.
Its Chief Executive, Mr Choe Peng Sum, said: “We think there is scope for at least another Frasers property here, but we are a bit concerned about the high building and land costs here. Just a couple of years ago, it used to S$700 per sq ft of plot ratio for hotel lots, then S$900 and S$1,200.
“Recently, a white site near Novena Square fetched over S$1,600 psf of plot ratio. At those prices, it doesn’t make economic sense to put up a serviced apartment,” he said.
Mr Choe has not totally given up, however, and will continue to be on the lookout for assets that will add to its 850 apartments in five properties in Singapore and 12,300 apartments in 76 properties worldwide, including those in the pipeline.
He highlighted the company’s Capri brand that caters to the “e-generation” of business travellers who are on short business stints of between one and two weeks.
At the grand opening on Thursday of the company’s first Capri brand project here, called Capri by Fraser Changi City, Mr Choe said: “It is very much our plan to explore the growth potential of this brand internationally throughout Asia and beyond.”
Capri at Changi has been in business since October and Mr Choe said: “The positive international response that Capri by Frasers has generated within a relatively short span of time is a strong indication that there is a demand for a hotel residence brand that is well positioned to meet the 24/7 work-life balance needs of the rapidly growing e-generation market sector.”
So, Frasers has plans for Capris in business cities like Ho Chi Minh City (opening in March), Kuala Lumpur (November), as well as Shanghai and Frankfurt. The company is also looking at places like Chengdu, Beijing, Urumqi, Istanbul, Brussels, London and Berlin.
Having met its target of 12,000 units by the end of last year, Mr Choe has set a new goal of 18,000 apartments by end-2015 and he thinks the second-tier cities of China show the most promise.
While Frasers badly wants a property in New York — it has none in the United States — high property prices there are an obstacle, just like in Singapore, so it is looking at San Francisco and Chicago, he said.
“Surprisingly, the Middle East is looking good and we’ll be opening two properties in Saudi Arabia and perhaps additional ones in Muscat, Doha, Bahrain and Dubai. India is a tough market although the business is there, and we will be opening in Gurgoun (near Delhi), Bangalore and Chennai,” Mr Choe added.
Source : Today – 26 Jan 2013