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Sandy Li

Cheuk Nang Properties may scrap a planned five-star hotel within its $3 billion serviced apartment-hotel-office development in Kuala Lumpur because of an expected oversupply of hotel rooms.

  Executive chairman Cecil Chao Sze-tsung said the group's main focus was on the two million square foot three-tower development in Kuala Lumpur.

  The project would be developed in three phases.

  The first phase included a 42-storey serviced apartment project with an investment cost of $300 million.

  'But we may scrap the hotel plan because of a glut in hotel rooms in Kuala Lumpur,' Mr Chao said.

  'If the first phase of the serviced apartments sales or leasing response is good, we may replace the hotel with serviced apartments.'   The schedule for sale or lease has not yet been finalised. He said the group might also turn the planned five-star 600-room hotel into a three-star or four-star hotel, depending on market conditions.

  Phase one is expected to be completed in two years. The hotel portion is in the second phase and the office tower is planned for the third.

   Mr Chao said the 72-storey one million sq ft office building would become the second highest office building in Kuala Lumpur after the Petronas Tower. Kuala Lumpur has imposed a 25-storey height restriction on all new office buildings.

    In Hong Kong, Cheuk Nang has committed about $580 million to two luxury residential projects and two office developments.

   Mr Chao said the group had changed the luxury low-rise residential development at 30 Severn Road on The Peak from four blocks to two, to make way for larger units.

  Projecting a boom for the deluxe residential sector, Cheuk Nang decided to enlarge the unit size from the original 4,000 sq ft to 7,000 sq ft and provide more garden space, he said.

  The new plan consisted of two three-storey residential blocks on a 20,000 sq ft site with an investment of $80 million, he said.

  The company had settled its dispute with the Government over the plot ratio of residential redevelopments at 192 and 216 Victoria Road in Pokfulam, he said.

  The company planned to spend $200 million building three four-storey blocks at 192 Victoria Road and two four-storey blocks at 216 Victoria Road, he said.

  A fifth residential block might be included in the 216 Victoria Road project but negotiations with the Government were still under way.

  Regarding the office sector, Mr Chao said the foundation work for its 31-storey commercial building at 244-250 Hennessy Road in Wan Chai had been completed. Cheuk Nang would retain four floors as the group's headquarters when the project was completed in two years, he said.

   The investment cost of the project is about $300 million.

  Mr Chao said it would not launch pre-sales of its projects until their completion, adding that he was optimistic about the property market's prospects after 1997.

  He believed the company would get a better price by selling at a later date. In the coming two years, he said rental income would be the group's main revenue-earner, with about $10 million per annum from Exchange Square in Melbourne, and $10 million from the villas at 200 Victoria Road, Hong Kong.



KL hotel plan may be altered because of glut