SINGAPORE (EDGEPROP) - James Koh, executive chairman and CEO of Singapore-listed Fragrance Group, is making big bets on the hotel sector. Last month, the group purchased Min Yuan Apartments en bloc for $141 million. The 999-year leasehold site of 14,629 sq ft is located next to Waterloo Apartments, another 999-year leasehold site of 14,369 sq ft which Fragrance Group purchased for $131.1 million last November.
Fragrance Group acquired Min Yuan Apartments at 62 Waterloo Street (pictured) early last month for $141 million, and intends to amalgamate it with the neighbouring Waterloo Apartments, which it purchased en bloc last November for the redevelopment into a hotel (Photo: CBRE)
The plan is to amalgamate the two sites on Waterloo Street and build a new 14-storey hotel of some 500 rooms, says Koh. Fragrance Group also purchased Tower 15, a 29-storey office tower on Hoe Chiang Road, for $360 million in 2012. The property has the potential to be redeveloped into a hotel with more than 800 rooms, adds Koh.
In Australia, the Singapore-listed group’s flagship hotel is the 296-room ibis Styles in Hobart, Tasmania, which opened two years ago. Although Fragrance Group has experience managing hotels in Singapore for the past 23 years, Koh felt it was “a bit tedious” to set up a team in Australia just to manage one hotel then. Accor was therefore engaged to manage the hotel in Hobart under the ibis Styles brand.
“The hotel has run smoothly for two years now,” says Koh. “In that time, we have developed a relationship with Accor. They expressed keen interest in exploring some opportunities with us in Singapore, so that’s how we started talking.”
The 296-room ibis Styles in Hobart, Tasmania, was Fragrance Group's first hotel in Australia and is managed by Accor (Photo: Fragrance Group)
The talks led to the recent deal struck in early October, which saw 13 of 15 Fragrance hotels under Koh’s privatised Global Premium Hotels Ltd (GPH) rebranded ibis budget under a franchise agreement. Another two Parc Sovereign hotels will be rebranded ibis Styles and Mercure, respectively, by next year. (See story)
Koh had spun off GPH, a portfolio of 23 hotels which he owns and manages, as a listed company in 2012. About five years later, he decided to take it private.
Under its listed entity, Fragrance Group, Koh has a second hotel in Australia opening in early 2020, with four more in the pipeline for completion in the next two to three years, in Melbourne, Perth and Hobart.
Fragrance Group also ventured into the UK in 2017. Koh’s first purchase there under the listed entity was the 180-room Imperial hotel in Blackpool; followed by the 141-bedroom Palace hotel in Torquay; the 85-guestroom Townhouse Hotel in Manchester in early September; the 115-guestroom Crown Hotel in North Yorkshire; along with the 141-guestroom Lyndene Hotel in Blackpool.
The 180-room Imperial hotel in Blackpool, Fragrance Group's maiden purchase of a hotel in the UK (Photo: Fragrance Group)
In 2018, Fragrance Group’s Koh also purchased a Grade-II listed hospital, the Royal Mineral Water Hospital in Bath. In July this year, he announced plans to convert the property into a luxury hotel.
The construction of his first hotel development in the UK is expected to commence in a fortnight. “We have already secured three planning approvals,” says Koh. “Planning approvals are not easy to come by in the UK.”
He reckons that by end of this year, he will be able to secure planning approval for five of his six hotel developments, with the sixth projected to get approval sometime in 1H2020.
Compared to Singapore, “development in the UK is a bit slower”, admits Koh. “For new developments, the most important is the layout of the building. To get the layout right, as the owner, I must be involved. You cannot entrust the design and layout to the architect alone.”
As he has an experienced project manager in the UK to oversee his developments, it is almost “on auto pilot”, says Koh. He makes it a point to visit twice a year and was last there in March. “UK is a nice place to visit, especially in the summer,” he says.