KUALA LUMPUR (Aug 6): Swiss-Garden Hotel Bukit Bintang in Jalan Pudu here has a new owner. Hotel tycoon Choo Chong Ngen, Singapore’s 10th richest with a net worth of US$2.8 billion (RM11.64 billion), bought the property from OSK Holdings Bhd last year for RM170 million.
“The group decided to sell the asset as we were looking to rationalise our portfolio of properties. This is part of an ongoing group-wide asset review exercise undertaken by our parent company,” Swiss-Garden International Hotels, Resorts and Inns’ chief operating officer Peter Gan told The Edge Financial Daily.
Documents sighted by The Edge showed that the transaction was made through Chong Ngen’s privately-held Allstar Odyssey Sdn Bhd. A search on the Companies Commission of Malaysia website revealed that Allstar is owned by Legend Land Malaysia Pte Ltd, whose directors are Chong Ngen and Choo Bee Lian. Legend Land Malaysia is a Singapore-based company with its registered address at Parkway Parade, Singapore, which is also the registered address of Hotel 81 Management Pte Ltd.
The 296-room Swiss-Garden Hotel Bukit Bintang marks Chong Ngen’s second hotel here, joining the 154-room Nova Hotel in Jalan Alor. The quarter-century old Swiss-Garden Hotel Bukit Bintang, formerly known as Swiss-Garden Hotel Kuala Lumpur, is currently undergoing extensive renovation and is slated to reopen on Aug 15.
In December 2017, Chong Ngen, founder of the Hotel 81 budget chain in Singapore, had bought Nova Hotel for RM63.8 million through Regalwide Holdings Sdn Bhd. It has since hired an international hotel operator and rebranded the hotel as Travelodge Bukit Bintang. It is understood that Chong Ngen is retaining OSK’s Swiss-Garden International Sdn Bhd as the hotel operator for the new property.
Together with the sale of Garden Lodge in Sydney, Australia, OSK made a gain on disposal of RM93.5 million for the financial year ended Dec 31, 2018 (FY18). OSK in its FY18 annual report released in March stated that it plans to use the proceeds from the disposal to fund planned renovations at other hotel properties as well as pare down its debts. With the gain, it has posted a pre-tax profit of RM73.6 million on revenue of RM81 million for FY18. Without the gain on disposal, the group’s hospitality division would have posted a pre-tax loss of RM19.9 million.
In October 2016, The Edge reported that OSK’s wholly-owned subsidiary PJ Development Holdings Bhd (PJD) had put three hotels — Swiss-Garden Beach Resort Kuantan, Pahang, Swiss-Inn Johor Baru, Johor and Swiss-Inn Sungai Petani, Kedah — up for sale. PJD, which was taken private by OSK in 2016, has not sold any of the hotels.
“Investing and divesting is a natural process and an important aspect of the hotel business. As such, we are also open to consider suitable bids for the hotels if the pricing is right. In the meantime, we are committed to managing our hotels in the best possible manner to serve our guests and generate returns for our shareholders,” Gan said of the three unsold hotel assets.
In addition to the three hotels in Pahang, Johor and Kedah, the group also owns the Swiss-Inn Chinatown Kuala Lumpur and the Swiss-Garden Beach Resort, Damai Laut in Lumut, Perak.
On whether the group will consider selling its other hotel assets, Gan said OSK is keeping its options open.
“Many hospitality groups build new hotels or buy existing hotels, and concurrently divest existing hotels. Should there be suitable bids [for] our assets, we would be open to selling our hotels. Likewise, we can also consider growing our portfolio of assets if we come across suitable opportunities,” he added.
Apart from the five hotels that it owns, the group also manages Swiss-Garden Resort Residences, Sg Karang in Kuantan, Pahang and Swiss-Garden Residences Kuala Lumpur. It will launch the 561-room Swiss-Garden Hotel & Residences, Genting Highlands, Pahang this month. Swiss-Garden Hotel Melaka, meanwhile, is a franchised property.
Although itself a hotel operator, OSK recently hired its international counterpart to operate its hotel in Damai Laut.
To this, Gan said: “OSK has invested substantial sums of capital over a long period of time in developing tourism in the Manjung district in Perak, where Damai Laut is located. This is where our executive chairman Tan Sri Ong Leong Huat grew up, and he has a strong commitment to the wellbeing and development of his hometown.”
He added that as part of its effort to contribute to the growth of tourism in the state, OSK has invested in the hotel and developed infrastructure such as roads, a jetty and lighthouse, an 18-hole award-winning golf course, holiday bungalows and apartments and a mini water theme park.
“The group has decided to rebrand Swiss-Garden Beach Resort Damai Laut into a DoubleTree by Hilton Damai Laut Resort to draw more international clientele to the hotel. Also, Hilton is a world-renowned hotel operator with a strong brand and a large customer base. It is our hope that this partnership would give greater prominence to Lumut as an international tourist destination,” explained Gan.
Hilton is expected to take over the management of the 291-room hotel next year.
This collaboration with Hilton is the second partnership between OSK and the Hilton Group following a recent signing between Yarra Park City Pty Ltd — OSK’s joint venture company with the Employees’ Provident Fund in Melbourne, Australia — and Hilton for a 600-room hotel in Melbourne Square. The yet-to-be-built hotel will form part of a A$2.8 billion (RM7.9 billion) mixed-use development there.
This article first appeared in The Edge Financial Daily, on Aug 5, 2019.