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Saturday, July 10, 2010

Good uptake for serviced units

With the uptrend in the global economy, managers and operators of serviced apartments in the prime areas of Kuala Lumpur are seeing healthy occupancy rates for their units.

Choe Peng Sum at the balcony of a serviced apartment managed by Frasers Hospitality. He estimates there are some 30,000 hotel rooms in Malaysia compared with 2,800- 3,000 serviced apartments.

Frasers Hospitality Pte Ltd, the hospitality arm of Singapore-listed consumer group Fraser and Neave Ltd, is optimistic about the serviced apartments sector in Malaysia, says chief executive officer Choe Peng Sum.

“With the economy picking up, we expect to see more businesses coming into the country.

“Many of their personnel tend to remain in the country for long periods, like a year or two, and for them, staying at a serviced apartment is often a more viable option than putting up in a hotel,” he tells StarBizweek.

In fact, there appears to be a high supply of hotels compared with serviced apartments in Malaysia.

“As the economy picks up, we expect an increase in the supply of hotel rooms. An oversupply situation is likely to affect occupancy rates. However, the supply of serviced apartments in Malaysia is not very high.”

Choe estimates that there are some 30,000 hotel rooms available in Malaysia compared with 2,800-3,000 serviced apartments.

The company is currently in collaboration with Ipoh-based YNH Properties Bhd to set up a second serviced apartment project – Fraser Residence Kuala Lumpur.

‘Shorter stay packages can fit a lot of people’s b udg ets,’ says Melissa Ram.

The building is under construction near the Renaissance Hotel and should be operational by 2012.

Last month, it had a grand opening of its maiden serviced apartments, Fraser Place Kuala Lumpur.

At the time of opening, Fraser Place had an occupancy rate of 89% and was offering an initial promotional price of RM260 to RM300 per unit per night.

The units occupy floors nine to 30 of an integrated retail and office complex in Jalan Perak and comprise a total of 215 studios, one and two-bedroom apartments and penthouses.

On the global level, Frasers Hospitality also has a second brand, Modena, which caters to corporate individuals who are constantly travelling.

“We call this group of people ‘roadwarriors’. These units are for those looking for something that is a little less pricey but more than a budget hotel. Modena is a step down from our other brand offerings (in terms of price),” Choe adds.

The company currently has two serviced apartment schemes under the Modena brand in China, and is looking to set up four more projects there.

It is also looking at serviced apartments under the Modena brand in India, Singapore, Vietnam and Kuala Lumpur.

Frasers Hospitality currently manages 35 properties in 21 cities.

Virgin Properties Sdn Bhd, which has been operating the Lanai Gurney Corporate Suites off Jalan Ampang since April 2008, has seen “very good” occupancy rates in the first half of 2010 versus the same period of 2009, says chief operating officer Melissa Ram.

“We saw an average occupancy rate of 80% in the first six months of the year,” she says, adding that the company has also revised its marketing strategies to cater to short-term tenants.

“We’re looking at a different segment than what we targeted last year. Shorter stay packages can fit a lot of people’s budgets.”

Located just 2km from the KLCC area, Lanai Gurney targets mostly expatriates, corporate clients, government agencies, business travellers, filming groups and students. The rates range from RM1,000-RM3,800 per month.

Based on commercial standards, Ram says the rates of Lanai Gurney may be increased in the near future.

“Property prices within the vicinity have gone up and we are also planning to offer more services to our tenants in the future. So naturally, we plan to increase our prices.”

According to Ken Holdings Bhd executive director Sam Tan, the response to its recently launched Ken Bangsar high-end serviced apartments in Bangsar has been overwhelming which he attributes largely to the project’s good location.

Some 70% of its units have been taken up and the tenants are a mix of locals and expatriates. Ken Bangsar has 80 units that are priced from RM800 to RM1,200 per sq ft.

By The Star

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