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City&Country: UOA ventures into hospitality with Frasers

UOA Development Bhd’s COO David Khor did not allow his bout of fever to dampen his excitement about the group’s latest milestone — its venture into the hospitality sector  hand in hand with Singapore-based Frasers Hospitality Pte Ltd.

“We knew Frasers was the one because we share the same culture and the company is long established in the hospitality industry,” Khor tells City & Country.

The new hotel residence hospitality brand being rolled out by Frasers, known as Capri by Fraser, will operate its first Malaysian establishment in the Camellia Serviced Suites at UOA’s flagship Bangsar South integrated development in Kerinchi, Kuala Lumpur.

The 60-acre leasehold Bangsar South, of which 25% is completed, comprises retail component The Sphere; The Park Residences, which will feature seven blocks of serviced apartments; The Horizon, which has twenty-two 10 to 20-storey office blocks; Vertical office suites; an 84,400 sq ft healthcare centre occupied by Life Care Diagnostic; the RM100 million community clubhouse Club Nexus; a six-acre central park; and a 160m RM6.8 million bridge that links Bangsar South to the Kerinchi LRT station.

Bangsar South has an estimated gross development value (GDV) of RM8 billion and is expected to be completed within the next five to seven years.

Capri by Fraser at Bangsar South expects to welcome its first guests in 3Q2013. It will occupy the 22nd to 31st floors of the 34-floor Camellia. The 10 floors will comprise 240 serviced apartments and rooftop facilities for work and play. UOA plans to keep the suites for recurring income.

In total, Camellia will consist of  720 apartments — studios to three-bedroom units — with built-ups of 638, 861 to 1,419 sq ft. Prices start from RM568,800. To date, says Khor, 72% of the 480 units put up for sale have been taken up since Chinese New Year last year.

For ‘young road warriors’
Capri by Fraser is conceptualised as a casual and youthful brand. It will offer free WiFi connection round the clock throughout the premises in a bid to cater for what Frasers’ CEO Choe Peng Sum calls the “always-on generation”.

“If you come to Capri by Fraser, you’re not going to be intimidated by big lobbies. You’re going to feel informal and really, really at ease,” he tells City & Country.

The facilities include an en suite kitchenette in each apartment, a laundrette on each floor with table soccer, Nintendo Wii, XBox 360 and Kinect, an outdoor barbecue area, a playground, 24-hour fitness centre, infinity pool and function and meeting rooms.

The Capri by Fraser hotel residences will occupy the “premium” floors, which will have separate entrances and lobbies, including an entrance from Jalan Kerinchi just for guests. The check-in system will also be modernised, using iPads and software to do away with the hassle of paperwork.

Frasers’ other brands are Fraser Place, Fraser Suites, Fraser Residences and Modena.

“Fraser Place, Fraser Suites and Fraser Residences are what we call the gold standard of serviced residences. They are more for the extended-stay market. And all the years we have been working, we asked for market feedback, and they asked, ‘What about shorter stays?’ And younger people do go to Fraser serviced apartments,” Choe says.

“The three brands are defined more by their design and location than their category because they are all five-star. Fraser Place Kuala Lumpur, for instance, is located in the entertainment district, so it’s more colourful, vibrant and chic. Fraser Suites is more sophisticated and Fraser Residences is what we call contemporary minimalist. That’s what the three brands are all about. Modena is also a serviced residence brand, but it is one notch down — four stars.

“So Capri by Fraser fits into our portfolio very well because it caters for a very different group of people.”

Capri by Fraser also sets itself apart from the other Fraser brands with shorter stay options for guests. “So, what we do is try to marry both [hotel and serviced apartments] by offering hotel-type services, which reflect our 14-odd years in the extended-stay market,” says Choe.

UOA’s Khor opines that this type of service will not only add value to Bangsar South, but also meet a need of the multinational corporations that occupy The Horizon office blocks as staff on short-term assignments at these offices will require accommodation.

So far, about 19 of the 22 blocks have been leased out and have achieved about 99% occupancy. Some of the MNCs include Air Products Sdn Bhd, the Malaysian unit of Fortune 500 company Air Products and Chemicals, Inc, and Averis, which provides services to the RGE group that deals with agriculture and energy resource development, among other things, as well as home-grown organic goods direct-selling outfit Melilea International group.

The local companies include Malaysian Electronic Payment System Sdn Bhd, Touch ‘n Go Sdn Bhd, Takaful Ikhlas Sdn Bhd, Time Engineering Bhd and CIMB Group.

“We had also obtained MSC cybercentre status [for Bangsar South] and one of the advantages of being an MSC-status development is that [companies operating from here have] no restrictions on engaging foreigners to be their employees. We have multiple broadband service providers because that is a requirement for cybercentres,” says Khor.

A union of ideas and ideals
The decision to engage Frasers to run the serviced suites was made after meetings with a few domestic and foreign serviced apartment operators. UOA and Frasers found that their goals and visions were quite aligned, says Khor.

YNH Property Bhd had engaged Frasers to run Fraser Place Kuala Lumpur at Lot 163, Jalan Perak. The group manages 215 units from the 9th to 30th floors. When the serviced apartments were soft-launched in October 2004, they were sold from RM780 psf with a rental yield of 8% per annum for two years.

At the 16-storey office tower that is part of Lot 163, Frasers is in the midst of turning unused office suites on the 4th to 16th floors into 106 new serviced apartments. 

At YNH’s Lot 188 in Jalan Sultan Ismail, the group plans to open Fraser Residence Kuala Lumpur within the next 18 months.

Choe says it is a “privilege” to work with UOA. “Capri by Fraser in Bangsar South fits  what we were looking for perfectly.

“Bangsar South is a mini-city with great infrastructure and easy access to Kuala Lumpur’s CBD.”
“We are also going to open Capri by Fraser at Changi City [in Singapore, which] is not in Orchard Road or in Raffles. It’s in Changi, a little hub of its own.

However, Choe notes that the group is not discounting other locations outside of integrated developments as various factors such as location, accessibility, ease of movement and support facilities are still key.

“Because as a serviced residence and a hotel, you cannot exist in a silo, out of nowhere ... You still need to have the necessary infrastructure to support the viability of the project.”

Future plans
UOA has a number of launches valued at RM1.4 billion this year, excluding its Le Yuan Residence mid-range condominium in Jalan Kelang Lama with a GDV of RM500 million that was launched earlier this year.

Other upcoming launches are strata offices Vertical Office Suites in Bangsar South (GDV of RM700 million), Desa III bungalows (GDV: RM14 million) and condominium Desa 8 (GDV: RM49 million) in Taman Desa, Kiara IV mid-range condominium and villas (GDV: RM500 million) in Segambut and retail shops on a tract in Subang Jaya along the Federal Highway and opposite Empire Subang (GDV: RM130 million).

“We are always on the lookout for acquisition opportunities if the land fits our strategy. Our medium to long-term plan remains unchanged — focusing on projects in the Klang Valley while nurturing the value of our over RM8 billion flagship development Bangsar South,” says Khor.

Meanwhile, Fraser plans to add seven more properties to its portfolio of 73 properties in Asia-Pacific, the Middle East, Europe and Australia. “In September this year, we will be opening our third property in Australia — Fraser Suites Perth in addition to Fraser Suites Sydney and Fraser Place Melbourne.

“Other properties slated to open this year are Fraser Suites Guangzhou, Fraser Suites Bangalore, Fraser Residence Mengteng, Jakarta, and of course, Capri by Fraser at Changi City and Capri by Fraser in District 7, Ho Chi Minh City,” says Choe.

He adds that the group is in talks with operators in five other cities in Asia-Pacific to roll out the Capri by Fraser brand, but declines to say more.

This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 910, May 14-20, 2012

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