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Saturday, December 8, 2007

The Kwek factor

SINGAPORE’S billionaire Kwek Leng Beng is extremely well preserved. In his 60s, he is as suave and as elegant as his newly refurbished and rebranded Grand Millennium Kuala Lumpur.

Kwek arrived in Kuala Lumpur last Tuesday evening “to check out the hotel”, his first Grand Millennium under Millennium & Copthorne Hotels plc’s (M&C) stable of four brands – Grand Millennium, Millennium, Copthorne and Kingsgate.

M&C is a subsidiary of Singapore’s City Developments Ltd, which is part of the tycoon’s Hong Leong group of companies in Singapore.

Says M&C chief operating officer Michael Sengol: “He is very passionate about anything he lays his hands on. He wants to see if the furniture is right, whether it complements the overall ambience, and if they don’t, they have to be changed. He checked out all the food and beverage (F&B) outlets and this afternoon, he is going to try the pool.”

Located in Jalan Bukit Bintang, the former Regent hotel had a multimillion US dollar makeover which saw it being rebranded as Grand Millennium, owned and managed by Kwek’s London-listed M&C. It is the first of three in this class under M&C, which he, Kwek, chairs.

It will be simultaneously launched with Grand Millennium Bangkok in the next several months, with Grand Millennium Beijing opening its doors before the Beijing Olympics. Millennium Chengdu and Phuket will also open next year.

Says Kwek: “The Grand Millennium is top of the range. It is a brand for the well-heeled, who are accustomed to the highest level of service and facilities. The world today is looking for a lifestyle. But we must be careful because too much of it renders it outdated. What is important is service.”

He is currently also identifying other hotels around the world to upgrade as part of his strategy.

“But replicating hotels in key strategic locations is not easy but it can be done. We have five hotels in London. I have from time to time Middle Eastern people who are interested to buy some of these and we also have hotels in the Middle East. With the petrol dollar, there are some very fine hotels there.

“We are long-term players and we have a vision. When opportunities come, we grab it. Everything boils down to yield, but there must also be enough emotion about the property. The yield is important, but is it workable?”

From his family’s stable of six hotels in 1989, Kwek has expanded that to 114 hotels in 18 countries today. He is reported to have an estimated net worth, in 2005, of US$3.6bil, much of it derived from real estate in one form or another. Although the Hong Leong Group covers a multitude of sectors – property investment and development, hotel ownership and management, financial services and industrial enterprises – it is property development and hotels which interest him the most.

“I like high-end property development. Hotels are exciting because the industry keep on evolving. Today, there is the trend of combining hotel and service apartments. But there must be enough land to accommodate both. Fortunately, I have many hotels with a lot of land. And you will soon see this combination with the development of Millennium Residence, a high-end serviced apartment next to Grand Millennium,” he says.

Several years ago, he was crowned Asian Hotelier of the Decade. It is not a title he got for nothing.

In 1995, he bought New York’s The Plaza hotel with Saudi Arabia’s Prince Alwaleed from real estate tycoon Donald Trump for US$325mil. About a decade later, the prince and business tycoon sold it for a record price of US$675mil.

In 1999, he beat 19 global bidders to buy Seoul Hilton for US$357mil from the then troubled Daewoo group.

Kwek’s business acumen is legendary. Coupled with his taste for fine things, impeccable service and style, he has assembled a package which appeals to the moneyed, be it luxury homes or hotel accommodation.

“Sometimes, I pose as a guest. I talked with them to find out how I can improve my hotels and services, what they would like to do as a tourist in Singapore and Malaysia, their experiences in both countries. I get a lot of feedback this way. Life is, after all, experiences.”

Kwek inherited his wealth from his father, the late Kwek Hong Png. And his business acumen and entrepreneurship has helped to expand that many times over. The story of the Kwek fortune is a classic overseas Chinese success story. Kwek Hong Png left Fujian province in China as a penniless teenager with three brothers. They arrived in Singapore in 1928 and later founded the Hong Leong group there, named after one of the brothers. Kwek Hong Png’s brother, Hong Lye, moved to Malaysia to expand the family business. When the next generation took over, the business interests diverged, the Singapore/ Malaysia cross-shareholdings remain.

While Kwek Beng Leng looks after the family business in Singapore, his cousin, Tan Sri Quek Leng Chan – the family name is spelled differently in Malaysia – looks after the Malaysian interests.

“You can grow organically or you grow by acquisition. Whatever business you are in, you must be passionate about it.

“You must try your level best to understand the subject matter because there will be pitfalls. Look at your business model and cash flow. Make sure they match the earnings and have a good financier who understands you and the marketing and sales of this lifestyle.

“In other words, you must fall in love with the subject. But that is still not enough. You must have a vision and big dreams. You may not achieve the dreams to the degree you want, but if you keep at it, you will achieve a part of it.”

Global brand
London-listed Millennium & Copthorne Hotels plc today has 114 hotels in 18 countries. It operates five luxury London hotels that account for around a quarter of earnings. Its Asian operations make up around a third of yearly turnover, with three up-market New York hotels also making up a sizeable share.

“The Grand Millennium will be a global brand, as with all our hotels. We will own and manage it. In Kuala Lumpur, we are in the very heart of the business community, the entertainment and the shopping. Fifth Avenue, for example, is good for the business people. This location is wonderful for both the business and leisure group because of the more than 3,500 shopping outlets, most of which are branded, in the vicinity. And of course, there is the super new mall next door,” he says.

A connoisseur of all fine things, from clothes to hotels, homes to cars, he knows a good deal when he sees one and he sees potential in budget hotels.

He will be investing US$20mil in Tune Hotels, a pin drop for him actually. Istithmar PSJC, the investment arm of state-owned Dubai World, will take the other 40%, while Tune will hold a 20% stake in the US$50mil joint venture. The plan is to open 30 budget hotels in Southeast Asia over the next 24 months.

“I see the budget hotels as one of the ways to go. All over the world, developers keep building five-star hotels. Nobody caters to the budget traveller. We will and it will be a success.

“Malaysia has many attributes and tourism is an invisible export. There is a lot of natural beauty here. It is all a question of implementation. The advertisement on CNN selling Malaysia as a tourist destination is wonderful. But how do we get to some of these places? There is a need for more open skies, for example. The budget airline, the budget hotels have to grow to give options and variety.

“You also have the very rich from Vietnam, China and India. And you are in a position to target the Middle East. But in any business, having ideas is not enough. The idea can be fantastic and workable, but you need the right people to implement it and you need a time frame, otherwise cost will escalate. You have to assemble yourself to go.

“I’m a big picture person. I like to see the implementation from A to Z. Along the way, there are blockages and hiccups; I believe in practical guidance. So the difficult part is implementation.

“I started my working life in 1964. I worked in Malaysia for my family company from 1964 to 1966. I spend a lot of time here in the early years, although I have not been here as often today because of my commitments elsewhere, particularly in Singapore.

“I have to work a lot harder today because things are moving a lot faster. There is a lot of scope for cross selling between Malaysia and Singapore. But implementation has not been very effective. But we’ll get there.

“The Iskandar Development Region (IDR) for example is exciting but again it comes down to implementation. If you execute it well the route to success will be shorter. I personally think it is a win-win situation for both Singapore and Malaysia. It is significant that you have the IDR on the southern tip and the Northern Corridor Economic Region in the north and Kuala Lumpur in the middle.”

By The Star (by Thean Lee Cheng)

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