World’s first Harrods Hotel — has Malaysia lost bragging rights?

THOSE who had headed for Jalan Bukit Bintang through Jalan Raja Chulan in the last couple of weeks would have noticed that the hoarding for the site earmarked for the Harrods Square project has been replaced by a new one — minus any reference to a Harrods Hotel.

This move suggests that the plan for Malaysia to host the world’s first Harrods Hotel may have fallen through.

Tan Sri Syed Mokhtar Albukhary, Tan Sri Desmond Lim Siew Choon and Qatar Holding LLC were to set up a tripartite joint venture to open the luxury hotel in the Bukit Bintang enclave in 2018.

Previously, the hoarding displayed the words, “Harrods Hotel — First In The World” and an artist’s impression of the buildings of the development, the top of one of which was inscribed with the word “Harrods”. Today, however, the “advertisement” has been replaced by “A New 5 Star Luxury Hotel” while the inscription has been removed.

Numerous calls and messages sent to Ooi Ah Heong, the adviser for the project, went unanswered. It remains unclear whether the project has lost just Harrods Hotel or if it has also lost its investment partner Qatar Holding.

The industry was anticipating Harrods Hotel to set the benchmark for luxury hotel rates that were higher than those expected to be set by Four Seasons Place Kuala Lumpur. As the first in the world, the Harrods Hotel brand was to have been in the same league as the Bulgari and Armani hotels.

Sources say Harrods Hotel may no longer be opening here because its average room rate of over RM1,000 a night may be unachievable here, considering that Malaysia is known to have one of the lowest, if not the lowest, room rates in the world.

It has been over three years since Qatar Holding, a unit of Qatar Investment Authority (QIA) and the owner of the Harrods brand and retail business, announced its intention to open hotels in not only Kuala Lumpur but also London and Sardinia in Italy.

Qatar Holding’s vice-chairman Dr Hussain Ali Al-Abdulla said at a press conference in July 2012 that the company had done due diligence and planned to build a Harrods hotel, apartments and retail units in KL. He indicated that Malaysia was likely to host the world’s first Harrods Hotel. Qatar Holding signed a memorandum of understanding with Jerantas Sdn Bhd, the developer of the property, to explore the viability of a Harrods Hotel in Bukit Bintang.

At the same event, Ooi, who represented Jerantas, said that the land for the project had been acquired for RM1,800 psf in a government tender.

Subsequently, in January 2013, a ground-breaking ceremony was held with great fanfare at Restoran Seri Melayu, which is located on the 150,609 sq ft site. The restaurant then made way for the development, signalling that the partnership had progressed beyond the MoU. Furthermore, the building housing Chulan Square on the adjoining 53,970 sq ft plot was torn down and the whole site was fenced up.

However, following a land search at the Federal Territories Director of Lands and Mines Office, in January and April this year, The Edge discovered that the two parcels had yet to be transferred and instead remained in the name of the Federal Lands Commissioner and Datuk Bandar Kuala Lumpur. In 2009, a registrar’s caveat had also been entered on the parcel held by the Federal Lands Commissioner.

This April, The Edge highlighted the possibility of the project being scrapped altogether as the new regime at sovereign wealth fund QIA was reviewing all pending projects initiated by the previous management, including investments by Qatar Holding. QIA has had a new chief — Sheikh Abdullah bin Mohammed bin Saud Al-Thani — since December 2014.

Meanwhile, there have been corporate developments at Jerantas, which is 34%-owned by Syed Mokhtar’s PS Trading Sdn Bhd and 66% by Lim and QIA joint-venture Gagasan Simfoni Sdn Bhd. It is understood that PS Trading has now been removed from under the purview of Tradewinds Corp Bhd but continues to be under the control of Syed Mokhtar. At least two directors — Datuk Poh Pai Kong and Shaharul Farez Hassan — no longer sit on the Jerantas board.

There is also a question mark over the stake in Gagasan Simfoni that is supposed to be equally held by Lim and Qatar Holding. A search on the Companies Commission of Malaysia’s website shows the shareholders to still be Datuk Manan Md Said and Raja Sa’adi Raja Amrin.

If the initial development plan was anything to go by, the mixed-use luxury project was to feature four blocks comprising a 27-storey hotel with 102 rooms and 60 serviced apartments; a 61-storey building with 508 serviced apartments and four floors of commercial and retail space; a 52-storey building with 516 serviced apartments and commercial and retail space; and a 31-storey office building with a food court and daycare centre.

The development was to have been connected to Pavilion KL through an underground passage as well as by a pedestrian bridge.

Pavilion KL is owned by the Pavilion Real Estate Investment Trust (Pavilion REIT), in which Lim has partnered QIA. It is understood that Lim also partnered QIA on the development of the mall fahrenheit88, which is located directly opposite Pavilion KL in Jalan Bukit Bintang. Yet another project in which both parties have partnered is Pavilion Banyan Tree Signatures, a serviced apartment development in Jalan Conlay.

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This article first appeared in The Edge Malaysia on Oct 12, 2015. Subscribe here for your personal copy.