CDL opens its first E Asia resort hotel in Phuket

July 30, 2008
CDL opens its first E Asia resort hotel in Phuket
Hotel arm M&C opening 2 more hotels in China and one hotel in Chennai
By ARTHUR SIM

CITY Developments Ltd (CDL) has opened the 421-room Millennium Resort
Patong Phuket after pumping in 4.3 billion baht (S$175 million) to
create its first resort hotel and retail complex in East Asia.

CDL says that the hotel and retail complex is the first to be opened
by an international hotel group in Phuket since the tsunami struck in
December 2004.

A 95 per cent stake of the site was acquired through the private
property fund Real Estate Capital Asia Partners in early 2006 for
about 2 billion baht. CDL has close to a 50 per cent stake in the
fund.

It is understood that the structure of a new complex already existed
on the site before the previous owners decided to sell it.

The Phuket hotel will be the fourth that CDL's hotel arm, Millennium
& Copthorne Hotels (M&C) has opened in Asia this year.

Two more hotels in China - Millennium Wuxi and Millennium Chengdu -
will open around the end of the year, following those already opened
in Beijing, Xiamen and Qingdao. A hotel in Chennai, India is expected
to open in 2009.

M&C CEO Richard Hartman added: 'We believe that our strategy of
expanding our hotel portfolio in Asia in 2008 and beyond is the right
one, as demand for hotel accommodation is strong and is expected to
rise.'

Mr Hartman is a veteran in the industry and was with the
InterContinental Hotels Group and ITT Sheraton North American before
joining M&C in April.

Saying that CDL and his objectives closely match, he added: 'I wanted
to get back into a company that was real estate focused. I didn't
want to work for a company that was just managing brands.'

CDL and M&C's way of doing business is helping it get a foothold in
new markets like China and India, where big global hotel chains have
already made significant headway.

'A lot of (hotel property) owners find us more friendly, and more
flexible,' he said, adding that many big hotel chains will not stray
from brand templates, even if owners protest.

Another aspect of CDL's hospitality business that is likely to grow
is its real estate investment trust (Reit) arm, CDL Hospitality Trust.

Having just joined, Mr Hartman said he could not say which properties
were likely to go into the Reit next, but he did say that it
was 'advantageous to add more properties in the Reit'.

CDL does have an upcoming Singapore hotel at Mohamed Sultan Road that
could eventually be added to the Reit but more new Singapore
properties are unlikely for now. Mr Hartman said that it is currently
not looking at any of the hotel development sites that are being
offered under the Government Land Sales Programme.

M&C is Singapore's largest hotel group with a portfolio of more than
110 hotels in 18 countries with nearly 35,000 rooms.