BETTER late than never, one could say of Frasers Hospitality and Malaysia.
Having finally established a maiden property in the country, Fraser Place Kuala Lumpur is already proving a right fit. Occupancy rates at the 215 apartments have averaged 70 per cent in the six months since its soft opening in December, and are expected to exceed 80 per cent next month.
'It's been very, very encouraging,' Frasers Hospitality chief executive Choe Peng Sum told BT in an interview.
The latecomer to Malaysia intends to play catch-up, and is already planning a second property - Fraser Residence Kuala Lumpur - which will also be located in the city's golden triangle.
Both properties - the first sited in Jalan Perak and the second in Jalan Sultan Ismail - are a stone's throw from the iconic Petronas Twin Towers, and a joint collaboration with Malaysian stock exchange-listed developer YNH Property.
Ultimately, Mr Choe sees Fraser establishing three properties under Fraser and another under Modena.
If the hospitality player rues missing out on MARC Residences - jointly developed by a local company and CapitaLand in 2003 - it has decided to move on. 'We had been looking for a property around the KLCC area and looked at the MARC but thought the price was rather high. We never knew it would climb up so high.
'But this is exactly where we want to be.'
Johor is another possibility, but 'probably still early days'.
The expansion is aggressive elsewhere. Frasers Hospitality will open 10 to 12 properties this year, and another 14 next year. Besides Kuala Lumpur, debuts are earmarked for Budapest, Doha, Dubai, New Delhi, Osaka, Bahrain, Chengdu, Suzhou and Tianjin.
'While people may be more hesitant, this is the window we have to expand. Our type of business is adding more and more properties. It's a numbers game, and every property is a testament to the next.'
Given the average 90 per cent occupancy rates enjoyed by its European properties - an area arguably suffering the greatest economic uncertainties - its contrarian approach isn't entirely misplaced.
The pound and euro have also depreciated significantly in the past 12 months, although property prices have recovered. The company owns a third of the 35 properties it manages and any acquisition it makes is benchmarked against the weighted average cost of capital and internal rate of return (IRR). In Kuala Lumpur, it is aiming for double-digit IRR.
But its year-on-year compounded annual revenue growth of about 16 per cent is an indication of healthy customer support. Corporate customers make up about 85 per cent of all guests, half of them mid to long-term guests.
With 5,000 individual residences in 21 cities worldwide - and another 6,000 residences to be added by end-2012 - Mr Choe attributes Frasers' ability to retain the increasingly discerning business traveller to brand consistency and high levels of service.
The grand opening of Fraser Place Kuala Lumpur was attended by Fraser & Neave chairman Lee Hsien Yang and officiated by Malaysia's Tourism Minister Ng Yen Yen.
Source: Business Times, 25 Jun 2010