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Wednesday, November 7, 2007

Far East expands to East Malaysia

The current Sheraton Labuan will be renamed Grand Dorsett Labuan Hotel Malaysia

PETALING JAYA: Hong Kong developer Far East Consortium International Ltd (FECIL) has completed the purchase of the 5-star Sheraton Labuan last month.

FECIL’s representative in Malaysia, Eddie Tang told theSun: “We are keen to expand our hotel operations in Malaysia.”

The Dorsett Group, under FECIL, owns and manages FECIL’s hotels outside of Hong Kong and now has four hotels in Malaysia. “Through this purchase, we are also looking to expand into East Malaysia and have identified two hotels,” said Tang who is in charge of Dorsett Group’s operations. Hotels under its portfolio include the 4-star Dorsett Regency in Kuala Lumpur's Bukit Bintang, 5- star Sheraton Subang Hotel and Towers and the soonto- be-completed Maytower Hotel Serviced Apartment in Kuala Lumpur. The Dorsett Group also manages Dorsett Penang, formerly Sheraton Penang, and is building the 300- room Dorsett Johor, which is located off Pasir Gudang and is expected to be completed this year.

Sheraton Labuan will be renamed Grand Dorsett Labuan Hotel Malaysia next month, and Dorsett Group is planning an upgrading exercise costing RM20 million over a period of between six and nine months.

“If everything falls in place, the upgrading will commence in January 2008 and we also plan to increase the number of food and beverage outlets from the existing five outlets. The average occupancy levels are about 80% and on weekdays, we are running at maximum capacity,” said Tang.

FECIL purchased the 182- room, 10-year-old hotel for RM32 million from Jeram Bintang Sdn Bhd, a special purpose vehicle set up to dispose of Faber Group Bhd’s assets as part of Faber’s restructuring scheme. It also completed the purchase of Sheraton Subang from Jeram Bintang for RM120 million earlier this year.

FECIL expects to recover its total investment in Labuan between a six- and eight-year period. According to Tang, it is looking to improve the average room rate of Grand Dorsett Labuan upon the completion of the upgrading exercise. However, he declined to reveal the hotel’s current average room rate.

“With the booming oil and gas industry in Labuan, the hotel serves corporate guests more today. However, with our upgrading exercise as well as future plans for the hotel, we are targeting the tourist crowd and aim to boost weekend occupancy levels. Today, weekend occupancy is about between 40% and 50%.”

Meanwhile, Zerin Properties chief executive officer Previndran Singhe says, FECIL purchased the hotel at a fair price. “The deal works out to be about RM175,000 per room and I would reckon that to be below replacement costs.” He added that the Labuan hotel was valued at RM55 million.

By theSun (By Loo Pik Kwan)

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