SINGAPORE-BASED Park Hotel Group has set its sights on listing in 2011, just in time for its 50th anniversary, although it is still mulling over the details.
‘We’re planning to list in 2011 either in Singapore or Hong Kong. We have to study the different criteria and policies the two stock exchanges are offering,’ director Allen Law told BT in an interview.
One issue that the group is still undecided on is whether to list as an equity or as a real estate investment trust (Reit). Other factors, such as how best to mitigate foreign exchange risk, will also come into play.
‘Looking at our portfolio, Singapore . . . contributes almost 40 per cent of our total revenue. In terms of trying to manage foreign exchange risk, Singapore would be a better choice,’ he pointed out, but then went on to add that Hong Kong offers better interest rates. ‘We have to see closer to the date. Quite a lot is driven by the structure of the stock exchange as well as the macro environment.’
The group’s portfolio currently includes eight hotels – three each in China and Singapore, one in Hong Kong and one in Japan.
It plans to grow its footprint in Japan and China, but also sees room for expansion in Singapore in the coming years.
‘This year, we’re eyeing a couple of potential acquisitions in Japan. Apart from Japan, we’re looking at China which has always been our key target market,’ he added.
And while all eight properties are currently owned and managed by the group, it also plans to branch out by taking on management contracts. In the short term, management contracts are expected to contribute 10 per cent of group revenue.
‘We are looking to further expand our presence not only through acquisition or development but also through management contracts. That will translate to a faster expansion,’ he said.
Meanwhile, though the first half of this year has proven to be a tough one for the hotel industry here, Mr Law is confident that the second half will be a stronger one.
‘Since June, we have seen very strong forward bookings for the second half of the year. We do forecast much stronger demand for the second half,’ he emphasised, adding that 65 per cent of revenue for this year should come from the second half.
Its Grand Park City Hall hotel has seen occupancy fall by 10-12 percentage points this year to the ‘high seventies’, while room rates have taken a 25 per cent dive.
However, the latest addition to the stable, Park Hotel Clarke Quay, which soft launched in May this year, is performing above expectations.
Its Park Hotel Orchard is currently undergoing an $80 million renovation and will be rebranded as the group’s flagship property, Grand Park Orchard, when it reopens in 2010. The Grand Park Orchard will also house a four-storey retail podium, Knightsbridge.
About half of Knightsbridge’s 83,000 square foot of space has been taken up so far, Mr Law said.
Source : Business Times – 24 Aug 2009
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