Frasers Hospitality planning global expansion

Frasers Hospitality planning global expansion

 

Frasers Hospitality is planning an aggressive expansion globally, with 5,000 serviced apartment units slated for China, India and Vietnam by 2010.

 

The property arm of mainboard-listed Fraser & Neave then plans to expand its presence in the Middle East, Australia and Europe, and maybe even enter the US.

 

Among the service apartments that will be launched by 2010, one is a 23-storey prime properrt in Beijing, in which Frasers has invested 135 million US dollars.

 

But most of the company’s other upcoming serviced apartments will be owned by other parties, and Fraser will only operate them on fee-based management contracts.

 

In fact Frasers will own only 20 percent of the upcoming 5,000 rooms to be launched in the next 3 years.

 

Chief Executive Choe Peng Sum said the expansion will help to meet the pent up demand for serviced residences around the world, and especially in cities such as China and India, which are seeing tremendous economic growth.

 

He said the demand is being created by the fact that many firms are now cutting back on long-term expatriate contracts, and instead sending project teams to stay overseas for just a year or less.

 

“If you stay for 3, 4, 5, 6, 8 months, to stay in a hotel would be a bit claustrophobic after a while. Yet if you’re not signing 1, 2 or 3-year leases, then you’re not in the apartment or condo market. So we fall right in the middle, where we meet the needs of the mid- to long-term segment.”

 

After 2010, Frasers plans to expand its presence in the Middle East, with developments slated for Abu Dhabi, Kuwait, Doha and Oman.

 

Mr Choe added that the company also plans to expand in Australia and Europe, including entry into cities such as Prague, Budapest, Madrid and Barcelona.

 

He said Frasers is even looking for possible acquisitions in New York, as the US market is now softer in the wake of the subprime and financial crisis.

 

Source: 938Live