M&C finds room for acquisitions and expansion

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CDL Building along Robinson Road.
The Straits Times

While the domestic property market takes a breather, it is all systems go at CDL's hotel arm Millennium & Copthorne (M&C).

M&C owns and manages or operates a network of 120 hotels spread over many countries spanning China, Europe and the United States.

And if any Singaporean were to venture as far afield as the oil- rich Kurdistan region of Iraq, they can expect Singapore standards of service at the Grand Millennium Hotel Sulaimani. The hotel was opened just last month - the third in Iraq managed by M&C.

M&C is the largest Asian- owned hotel group in the world with about 32,000 hotel rooms in more than 20 countries.

Even as new hotels are being added to the company's portfolio, M&C has a healthy war chest of some $800 million for acquisitions and revamps.

M&C chairman Kwek Leng Beng says: "Today, hotel capital values have gone up quite a lot but earnings have not caught up - internationally as well as in Singapore. But we continue to have a vision to buy, search.

"At the same time, we add value to our existing hotels. With the right concept, we might be able to increase rates by 30 to 50 per cent. That's as good as buying or building a hotel, which would mean a gestation period of three to four years, a duration with no income."

In recent months, M&C has made three acquisitions in global cities, investing close to $600 million in the process.

The first, the Wyndham Grand hotel in Chelsea Harbour, London, bought for £65 million (S$136 million), is a Conrad Hilton all-suite hotel. The second was the Novotel New York Times Square purchased for US$273.6 million (S$343 million). The Boscolo Palace Roma in Rome, bought for €65.5 million (S$113 million), was M&C's first hotel in Italy.

Construction of the group's first hotel in Japan, in Tokyo's Ginza district, is set to be completed by the end of the year.

In total, there are more than 30 hotels in the pipeline worldwide, with many of the future hotel openings in the Middle East.

On the capital markets front, a listing on the Singapore Exchange may be in the offing for M&C's associate, First Sponsor Capital, which develops properties in China.

This article was published on April 22 in The Straits Times.

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