City Developments Limited, in conjunction with joint venture partners, has opened its first Bangkok hotel property, with the grand opening of the Millennium Hilton Bangkok.The Millennium Hilton Bangkok was recently totally rebuilt after being abandoned at the time of the 1997 Asian financial crisis. It was then taken over by the state-owned Thai Asset Management Corporation. Three years ago, CDL and US-based real estate fund Westbrook Partners jointly made a successful bid for the property.
The 543-room, 32-storey hotel was redesigned and re-constructed into a 5-star property complete with restaurants, spa facilities, ballrooms and unique meeting spaces. It opened its doors in March, and celebrates its Grand Opening last Friday. It’s the group’s first hotel in Thailand.
In March 2006, Real Estate Capital Asia Partners, L.P (RECAP) acquired a 95% interest in the Phuket Jungceylon Project, a mega hotel and retail complex of 2 million square in Phuket, Thailand.
RECAP is a private real estate fund in which CDL has significant interest with a US-based investment fund and other limited partners.
Phuket Jungceylon Project involves approximately 90,000 square metres of leasable retail space, over 900 car park lots, and an hotel of over 400 rooms. The project will have a gross construction area of 204,000 square metres, or 2 million square feet, and is located in Patong, the main tourist area of Phuket. When completed, Phuket Jungceylon Project will be the largest shopping and retail complex in Phuket.
“This project aims to inject confidence back into both the tourism and retail business in Phuket, following the deadly Tsunami of December 2004,” said Mr. Kwek Leng Beng, Executive Chairman of Hong Leong Group Singapore, which includes property giant CDL and Millennium & Copthorne Hotels plc (M&C). He added that Phuket Jungceylon Project and the Millennium Hilton Bangkok are two of several investment projects the group is undertaking with partners in Thailand.
Through RECAP fund, the CDL Group has also significant holdings in Millennium Residences. This property project involves the development of 604 residential condominium units, 1,000 car parking spaces and a retail building located on a prime freehold land in Sukhumvit district. Millennium Residences is scheduled to be completed by end 2008. When completed, this real estate project is expected to be among the most luxurious residential condominium projects in Bangkok.
Mr. Kwek said CDL was also involved in the commercial property sector in Bangkok - the Exchange Tower and another hotel, Millennium Sukhumvit Hotel.
CDL acquired an interest in the Exchange Tower (formerly known as Pornpat Tower) in Bangkok. The Exchange Tower is a Grade A office building and a modern retail mall, which offers approximately 42,000 square meters of lettable retail and office space and gross floor area of about 85,000 square metres. It is strategically located at the intersection of Asoke and Sukhumvit Roads, enjoying access to both elevated train and subway systems.
The renovation of the Exchange Tower is scheduled to be completed in June 2006.
Through its subsidiary M&C, the CDL Group has also entered into a joint venture with the Srichawala family to start construction of a five-star hotel, the Millennium Sukhumvit Bangkok. The 326-room hotel will be completed by end 2007 and will be managed by M&C.
Turning to his group’s hotel strategy, Mr Kwek said M&C has been focusing on the aim of increasing its footprint in Asia. In August this year, the Millennium Hongqiao Shanghai hotel will be opened under M&C management.
In Beijing, the group has agreed to invest in a joint venture to develop a 520-room hotel in the heart of the Beijing Central Business District. Currently under construction, the Millennium Beijing Hotel is scheduled for opening in the first half of 2008, in advance of the Beijing Olympics.
“While many hotels groups are going asset-light, M&C has been following a twin-strategy of owning and operating hotels,” Mr Kwek said. “It was fashionable to go asset-light two years ago, now some are questioning if this strategy is correct.”