The UOL Group has earmarked some $500 million - or a third of its available funds - to expand its hospitality business in Asia-Pacific over the next three years, the group's president and chief executive Gwee Lian Kheng told BT in an interview.
Lap of luxury: Pan Pacific Serviced Suites is likely to be the only one of its kind, as rising property prices mean that such an offering will be 'hard to replicate', says UOLThe property company plans to add some 15-20 hotels and service apartment properties over the next three years, Mr Gwee said.
'(Right now), if you ask me to put down money, I will put it into hospitality,' he said.
For Singapore especially, the hospitality sector looks to be the brightest going forward - even as the overall property market takes a breather - Mr Gwee said.
Yesterday, UOL launched its new 126-unit service residence development called Pan Pacific Serviced Suites, which the company hopes will be the first of many service residences under the Pan Pacific brand name.
Five such properties could open in the next three years, Mr Gwee said. Next up is Pan Pacific-branded service residences in Bangkok, which will open in about a year.
In Singapore, Pan Pacific Serviced Suites is likely to be the only one of its kind, as rising property prices mean that such an offering will be 'hard to replicate', the company said.
'Moving forward, our strategy is to look at high growth markets such as China, Vietnam, Thailand and Malaysia,' Mr Gwee said.
The Singapore property, which is located right next to Somerset MRT station, cost the group $38.5 million to build. Guests can check in from early April, and pre-opening interest has been strong, UOL said.
The company explored building a small office, home office (Soho) development on the site, but decided to go with service residences in order to ride on the current international business expansion into Singapore and the corresponding growth in expatriates looking for short-term housing, as well as the chance to grow the Pan Pacific brand.
UOL bought the hotel brand last year in a bid to become a key player in hotel management in the Asia-Pacific region.
The deal brought the Pan Pacific group's 12 hotels in the US, Canada and Asia into the UOL portfolio, adding some 3,800 rooms.
Now, UOL is looking to take the brand further with its first foray into service residences.
'Moving into the extended serviced accommodation business is a logical extension of the brand as it is complementary to our current hotel accommodation offering,' Mr Gwee said.
UOL itself, however, is not a newcomer to the service residences scene. It owns such a property under its Parkroyal brand, which it will maintain as a four-star property.
Pan Pacific Serviced Suites, on the other hand, is slated to be a five-star offering.
UOL also bought a hotel plot at Upper Pickering Street in a government tender in October last year. This 'may, or may not' be branded as a Pan Pacific hotel when it is completed by early-2011, Mr Gwee said.
For the overall property market, Mr Gwee said that UOL is 'cautiously optimistic' on the back of the sub- prime lending crisis in the US and the resultant credit crunch.
The developer plans to launch its 'mid-range' condo Breeze by the East on Upper East Coast Road as soon as it can.
Mr Gwee expects mid- level home prices to climb at least 10 per cent this year, pushed up by en-bloc sellers looking for replacement homes.
UOL shares closed four cents down at $3.65 yesterday.
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