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SCMP Reporter

MANDARIN Oriental, the luxury hotel group, plans to build a US$66 million hotel in Ho Chi Minh City, its first foray into Vietnam.

Mandarin has signed a letter of intent with Vietnamese companies Waterborne Transport Company II and the Housing Management and Trading Co.

Hong Kong property group First Pacific Davies is also involved in the project.

Mandarin will have a 53 per cent stake in the hotel as well as management control.

The hotel is to be called the Mandarin Oriental Ho Chi Minh City.

 Mandarin said that its total investment would be $22 million. The five-star hotel will have 250 rooms.

Martin O'Grady, group financial controller, corporate, at Mandarin said the move into Vietnam was a strengthening of its presence in the region.

 The company said the Mandarin Ho Chi Minh City would form part of the Saigon Centre, which is being developed in five phases by a joint venture that includes First Pacific Land and Straits Steamship Land.

 The Saigon Centre will be an office, residential and shopping complex.

Construction of the hotel is expected to begin next year and is due for completion in 1999.

 It is to be built in the heart of Ho Chi Minh City on Le Loi Boulevard.

 Mandarin said the hotel would also have several restaurants and meeting and conference facilities for 300 people.

 Mandarin has been on an expansion drive, seeking out new locations. Recent attempts to develop a $6 million hotel in Mexico faltered after the collapse of the peso, and last month a $43.5 million bid for a Washington DC hotel was thwarted.

 Mr O'Grady said the group was still looking for further development sites and properties, but was not limiting its focus to Asia, the United States or Mexico.

 'Definitely there is a focus on Asia,' he said.

 'But if the right opportunity is to come along, then we might just take it.'  Since the normalisation of relations with the United States, Vietnam has become a magnet for investors, and hotel companies have been showing interest.

 The Malaysian Kemayan Corp is said to be looking at Vietnam, as is Hong Kong's Four Seasons Hotels.

 One of Ho Chi Minh City's newest hotels is the 544-room New World.

  The 270-room Park Hyatt is due to open in 1998.



Mandarin to build US$66m hotel in Ho Chi Minh City