After seeing record growth this year, Frasers Hospitality is setting its sight on even more ambitious expansion for next year and beyond.
The serviced apartment arm of conglomerate Fraser and Neave (F&N) opened 740 units worldwide this year, bringing its total to about 5,000 in 20 cities. The latest is Frasers Suites Edinburgh.
Located in St Giles Street, off the Scottish capital’s famous Royal Mile, it houses 75 luxury suites in a historic 130-year-old building that used to belong to the local city council.
On a rainy evening last Wednesday, bagpipes heralded the official launch of their second property in Scotland – a homecoming of sorts as the founders of F&N were both Scotsmen.
And Frasers Hospitality will continue expanding its network, even in the uncertain economic conditions, its chief executive Choe Peng Sum told The Straits Times.
Frasers, whose average occupancy rate is holding steady at 80 per cent, is planning to double its residences to more than 10,000 by 2012.
The company had started with only two properties in Singapore in 1998.
While it may seem unusual to expand so aggressively during the global slump, the correction of property prices has actually thrown up opportunities, especially in Europe, said Mr Choe.
In London, for instance, property prices have dropped by about 30 per cent, after rising constantly in the last decade.
The company already has eight properties in London, as well as two in Paris. Other European destinations that might soon find themselves in Frasers’ cluster include St Petersburg, Prague and Berlin.
But Mr Choe feels there is still potential for growth for serviced apartments, as many countries do not provide enough of them. ‘There’s a pent-up demand, but the apartments must be well done.’
The only major continents that Frasers has not set up shop in is the Americas.
Mr Choe noted that North America, being a pioneer of serviced apartments, is not easy to break into while South America is simply too far away.
But he is not ruling out any possibilities, and added that Frasers is looking at New York and Sao Paulo or Rio de Janiero as their first ventures in those continents.
Source: Straits Times, 24 Nov 2009