People take photos in front of Singapore’s Merlion statue.
Real estate firms controlled by Singapore billionaires are headed for a bumper year, bolstered by a post-pandemic rebound in their hotels amid robust pent-up demand from both corporate and leisure travelers.
“The resilience of Asia-Pacific’s hospitality sector and reopening of borders have accelerated further in 2022, with pandemic-induced pent-up corporate and leisure demand ensuring that travel demand will soon be on par with pre-Covid levels,” Nihat Ercan, head of investment sales for the Asia Pacific at JLL Hotels & Hospitality Group, said in the property consultant’s latest Capital Tracker report.
Reflecting the increasing demand from travelers, Singapore billionaire Kwek Leng Beng’s City Developments said last week that it had returned to the black, with a record net profit of S$1.1 billion ($801 million) in the six months ended June 30. The results were bolstered by the sale in February of the Millennium Hilton Seoul, which was among the region’s biggest hotel deals this year. Hotel investments across the Asia-Pacific region climbed 33% to $6.8 billion in the first half and is expected to exceed $10 billion by year-end, according to JLL.
City Developments is among Asia’s largest hotel operators. Through its London-based subsidiary Millennium & Copthorne Hotels, the group owns and operates more than 130 hotels with over 40,000 rooms across key gateway cities around the world. The group also reported that its seeing a healthy take-up rate for its residential projects in Singapore, one of the few places in Asia still experiencing growth in its housing demand.
“With post-pandemic travel fueling the continued recovery, we expect hospitality to be a star performer for the rest of the year,” Kwek, the chairman of City Developments, said in a statement. “As Covid-19 concerns wane, our hospitality portfolio will be a valuable growth engine contributing meaningfully to the group’s recurring earnings.”
Parkroyal Collection Pickering, one of the hotels owned by Pan Pacific Hotels Group in Singapore.
Billionaire banker and real estate tycoon Wee Cho Yaw’s UOL Group—which owns the Pan Pacific Hotels Group—is also getting a strong boost from its hotel and residential property business. UOL said Friday that its net profit increased four-fold to S$371 million in the six months ended June 30. Total sales rose 36% to S$1.53 billion, with revenue from hotel operations climbing 64% to S$206.3 million.
Hotel Properties—controlled by billionaire Ong Beng Seng and his wife Christina—returned to the black in the first half, with a net profit S$1.92 million following the divestment of Hilton London Olympia. Expecting the recovery in the hospitality industry to be sustained, Hotel Properties is preparing to open new hotels and resorts around the world next year.
In 2023, Hotel Properties will open a new luxury resort in the Maldives, a key growth market for the company. Currently undergoing refurbishments, Kahuna Maldives—which comprises 81 villas on Lhaviyani Atoll, about 150 kilometers north of the country’s capital Male—will be managed by Six Senses Hotels & Resorts. The company also plans to open next year a 150-room hotel in Dubrovnik, Croatia as it makes inroads into Europe’s fast-emerging tourist destinations.
The tropical island of Maldives is a key growth market for Singapore-based Hotel Properties, which is opening a new luxury resort in the country next year.
Hotel Properties opened Voco Orchard Singapore (formerly Hilton Singapore) in January this year as the city-state gears up for the return of the Formula 1 Grand Prix, a franchise held by Ong, following a two-year hiatus. Visitor arrivals in the Lion City increased 12-fold to 1.5 million in the first half and the Singapore Tourism Board said last month that it expects the number to climb to as much as 6 million by the end of the year.