Fraser Suites coming to more cities on mainland
Sandy Li in Edinburgh
Global serviced apartment operator Frasers Hospitality plans to more than double its portfolio to 10,600 apartments by 2012, with the mainland providing its key growth market.
Frasers is also considering a listing in Singapore through restructuring its leasing portfolio into a real estate investment trust.
The company is the hospitality arm of Frasers Centrepoint, which is a wholly subsidiary of Singapore listed Fraser and Neave.
'China will be the largest of our key markets in terms of growth perspective,' said Frasers Hospitality chief executive Choe Peng Sum.
Other areas for further expansion included India, the Middle East, Australia and Europe, he said before the opening of the firm's wholly owned 75-unit Fraser Suites Edinburgh, its second property in Scotland.
The company's expansion has so far come through a combination of sole acquisitions, co-investments and third-party management agreements.
It operates close to 5,000 units, of which 4,171 are in China. In Shanghai alone, it operates 1,271 units and is the largest internationally branded serviced apartment operator in the city.
Under the expansion programme the company had embarked on, it aimed to manage or own 18 properties on the mainland by 2012, shifting the target of its growth efforts from the major cities in which it first opened to such centres as Chengdu, Tianjin, Suzhou, Dalian, Choe said.
Meanwhile, the company has also begun developing a second brand, Modena, to cater to younger business travellers.
The firm opened a 272-unit property, Modena Tianjin, in Shanghai in July and will open another Modena-branded serviced apartment in Shanghai and one in Suzhou within the next two years.
While the global economy had been battered by the financial crisis, economic growth on the mainland had been maintained at 8 per cent this year, and Frasers and Modena saw lots of growth opportunities ahead, Choe said. In Hong Kong, the company managed the 87-unit Fraser Suites in Wan Chai.
Although it would like to have a few more properties in the city, finding suitable opportunities was not easy, Choe said.
But while property prices in Hong Kong were still high, the company had taken advantage of market downturns elsewhere to speed up its acquisition spree.
For instance, property prices in London had fallen by as much as 35 per cent, and a similar situation had arisen in Vietnam, where prices were now 'more realistic', said Choe.
In the year ahead, Frasers Hospitality would debut in new markets such as India and Budapest and open new properties in existing markets in Japan and China, he said.
The firm opened its first European property, Fraser Suites Kensington, two years ago. Today it owns and manages eight properties in London, two in Paris, including one on the Champs Elysees, as well as Fraser Suites Glasgow and its Edinburgh counterpart.
Choe said the firm expected to put all the serviced apartments into a reit and list in Singapore. The timing of the listing would depend on the performance of the stock market, he said.