STANDING prominently at the junction of New Bridge Road and Cantonment Road is the Dorsett Singapore, a 285-room four-star hotel, and the adjoining 68-unit Dorsett Residences.
The hotel, which sits on top of the Outram MRT station, is scheduled to open in 1Q2013. Meanwhile, Dorsett Residences is expected to be completed by early next year.
Previews for Dorsett Residences, a residential development, were held on Sept 1, 2010, just two days after the government's property-cooling measures came into effect. The seller's stamp duty for purchases sold within one year of purchase was extended to three years, and the borrowing limit for those with an existing loan was lowered to 70% loan-to-value ratio from 80% previously. The measures may have cast a pall on market sentiment, but all the units at Dorsett Residences were snapped up within half a day, with most of the buyers being Singaporean and Indonesian investors. The average sale price for the units, which were mainly one- and two-bedroom apartments, worked out to S$1,800 psf, which was higher than the initial launch price of S$1,680 psf.
The location of the property proved to be in its favour, as it is on top of the Outram MRT station in the Chinatown area, near Singapore General Hospital and just on the fringe of the CBD, according to Winnie Chiu, president and executive director of Dorsett Hospitality International, a Hong Kong-listed hotel group formerly known as Kosmopolito Hotels International.
The Chiu family
Dorsett Hospitality owns and manages 18 hotels in China, Hong Kong and Malaysia, with another seven in the pipeline, including its maiden hotels in the UK and Singapore. The hospitality business arm was spun off from Hong Kong-listed Far East Consortium International, which is controlled by the Chiu family. Far East Consortium is involved in property development, property investments, including car parks in Australia, New Zealand and Malaysia, as well as hotels.
Winnie's 86-year-old grandfather, Deacon, founded the Far East Group in Hong Kong in 1959. He is chairman of Far East Consortium, and Winnie's father, David, is deput chairman.
Far East Consortium still holds a 73.1% stake in Dorsett Hospitality, which in FY2012 ended March 31 generated HKS$605 million in profit, a 190.3% increase from the previous year. Winnie was appointed president of Dorsett Hospitality a year ago.
While Dorsett Singapore is 100%-owned by Dorsett Hospitality, it was developed by the Tang Group of Companies, headed by Winnie's uncle, Dennis Chiu. The Tang Group of Companies is also part of Far East Consortium, and one of its units, Leedon Investments, had purchased the Dorsett Singapore site in 2009 in a government land tender, with a bid of S$67.7 million.
According to Winnie, who is based in Hong Kong, the total cost of Dorsett Singapore, including land and construction, is about HKS$666 million. With Dorsett Singapore, the Chius have now built a new landmark in Singapore. The hotel is also partnering OSIM and Sony for the furnishing of some of its suites, she adds.
The Chius invested in Singapore more than two decades ago, and their most prominent investment then was the former Tang Dynasty theme park. Other Singapore property investments by the Chius included 51 strata-titled office units in Parkway Centre, which it divested for S$53.375 million in March this year. The Chius still own a 47% stake in Pearl's Centre, a mixed-use development that comprises shops, offices and apartments along Eu Tong Sen Street, and an industrial building called Tang Logistics Centre in Changi South.
It looks like Pearl's Centre is now in play as the Land Transport Authority announced at end-August that it would be acquiring Pearl's Centre to build the new Thomson Line. Pearl's Centre will be torn down to make way for a new high-density mixed-use development that will be integrated with the Outram MRT station.
Winnie represents the third generation in the Chiu family business empire. After graduating with a degree in business management from King's College London in 2002, she joined Credit Suisse and was appointed to run the Shanghai representative office. However, she declined the offer, as "I didn't want to waste their money in training me when I was going to leave in a year or two", she says in an interview with City & Country when she was in Singapore for the ITB Asia travel trade show recently.
Following her stint at Credit Suisse, Winnie joined Malaysia Land Properties (MayLand), her father's private investment company. She oversaw the development of Plaza Damas, a mixed-use development and one of MayLand's flagship projects in Kuala Lumpur. Shortly after, she joined Far East Consortium, where she was appointed director of property development. When the hospitality business was spun off, she took charge of it.
The hospitality business under the Dorsett brand was started by David Chiu. The first hotel was the 320-room Dorsett Kuala Lumpur. The group has five hotels in Malaysia now, with three under the Dorsett brand. The other two are the 478-room Dorsett Subang and 178-room Dorsett Labuan. Two other properties in Malaysia operate under the Silka brand, which is positioned as a value chain. They are the Silka Maytower Hotel & Serviced Residences in KL and the Silka Johor Bahru.
In China, the group has three hotel properties — the 556-room Dorsett Grand Chengdu, its biggest hotel to date; the 329-room Dorsett Wuhan; and the 264-room Dorsett Shanghai. In Hong Kong, the group operates 10 hotels under various brands — four properties under the Dorsett brand, a fifth property under the Cosmo Hong Kong brand that has since come under the Dorsett label, and three properties under the Silka brand. It also manages the 162-room, award-winning Lan Kwai Fong Hotel in Central and the 55-room boutique Mercer Hotel in Sheung Wan.
Winnie doesn't feel sentimental about her business. She is willing to divest her assets if she feels the returns are good, with yields of 4% to 5%, as this frees up capital to acquire better-yielding assets elsewhere. As a rule of thumb, she will sell a hotel if she can get about HKS$4 million to HKS$5 million per key, depending on the location of the property. "If a hotel no longer fits in with our brand strategy, I will sell it," she says. "After we sell the property, we manage it for the new owners because we realise value from the management contracts."
For instance, the group completed the sale of the 209-room Dorsett Regency Hong Kong at end-September for HKS$800 million, or HKS$3.8 million per key, but it will manage the hotel for another six months. The sale of the hotel will mean a gain of HKS$450 million after offsetting the hotel book cost, according to Winnie. "I prefer to operate larger hotels with more than 250 rooms," she says.
At the same time, the group announced the purchase of The Matrix, an office building located at 9 Aldgate High Street in London, for £14.05 million. The building, which sits atop the Aldgate tube station, will be converted into a nine-storey, 260-room hotel with the addition of three more floors to the existing structure. It will then be renamed Dorsett London The Matrix. Including conversion cost, the total development cost is estimated at £21.9 million, or £135,763 per key, says Winnie.
The Dorsett London The Matrix is the group's second property in the UK, following the acquisition of the Dorsett Regency London in Shepherd's Bush last August. The new 322-room hotel is targeted to open in 2014.
In the pipeline are seven hotels, including the Dorsett Singapore. The other six hotels are located in Hong Kong, China and the UK. Winnie has set her sights on growing Dorsett's footprint across Asia. In China, she sees more opportunities in the second-tier cities.
Is there room for a second Dorsett property in Singapore? Winnie thinks there is still a shortage of rooms in the city-state. However, she is of the view that property prices here are still high. "Singapore is similar to Hong Kong," says Winnie. "With deals, you just have to keep on looking."
This story first appeared in The Edge Singapore weekly edition of Nov 5-11, 2012.
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