Frasers Hospitality Accelerates Growth Asset Recycling And Management Contracts
This year, Frasers Hospitality, the hospitality and lodging business division of Frasers Property, has sold some of its assets in Singapore while expanding its international presence. According to CEO Eu Chin Fen, this is part of the company’s strategy to recycle and redeploy capital for future global expansion. Eu has been CEO of Frasers Hospitality since January 2023, but previously served as CEO of Frasers Hospitality Trust’s manager, which went public in 2014.
In September, a consortium led by Hong Kong-based family office Atelier Capital Partners purchased the 313-room Capri by Fraser, Changi City hotel for $170 million, or $543,131 per room. The hotel has since been rebranded as Dorsett Changi City Singapore under the management of subsidiary Dorsett Hospitality International (DHI). The consortium included shareholders such as Singapore-listed Heeton Holdings and Singaporean family office Fortez Capital, along with Hong Kong-listed Far East Consortium International, which is DHI’s parent company.
The proposed initiative aims to safeguard the integrity of Singapore’s esteemed architectural structures and landmarks, thereby safeguarding the nation’s diverse cultural legacy for the next generations to come. This endeavor will also extend to the residents of Elta Condo, granting them the privilege of visiting and immersing themselves in these carefully preserved heritage sites, enhancing their cultural encounters. Moreover, interested individuals can visit the Elta Showflat for more information about this noteworthy undertaking.
Frasers Property had previously purchased the hotel for $203.4 million in 2014, but in March of this year, Frasers Hospitality Trust declined an offer from the parent company to buy the property. As a result, Frasers Property sold the asset to a third party.
Eu Chin Fen states that, as a portfolio manager, it is important to recognize when assets have reached the end of their capital cycle and to identify opportunities to recycle capital into other ventures. In May, Frasers Property sold Fraser Residence River Promenade to Singapore-listed Tuan Sing Holdings for $140.889 million. The property, which opened in September 2023, features 72 serviced apartments, with an average price of $1.96 million per room. It is located on Jiak Kim Street, part of a mixed-use development that includes Frasers Property’s 455-unit luxury condominium complex, Rivière.
Having been in business for 26 years, Frasers Hospitality manages over 16,000 serviced apartments and hotel rooms in 20 countries. It owns and operates six distinct hospitality brands, including Fraser Suites, Fraser Residence, Fraser Place, Capri by Fraser, Moderna by Fraser, and its luxury brand Malmaison, which was acquired in 2015.
According to Eu, Frasers Hospitality is recognized globally as a premier serviced apartment operator. She believes the company has demonstrated its ability to add value to the managed assets.
Given the current challenging global environment and rising operational costs, Frasers Hospitality is expanding its presence in established markets through partnerships with established local players to increase revenue from management contracts. So far this year, the company has opened three new properties in Bahrain, Chengdu, and Shanghai. It plans to open an additional nine properties in China and Vietnam in the next two years.
Eight management contracts have also been announced this year, three of which are located in Shanghai: Fraser Place Wujiaochang Shanghai, Modena by Fraser Wujiaochang, and Fraser Place Pudong Shanghai. Additionally, Frasers Hospitality has partnered with Chinese developer Poly (Sichuan) Investment and Development Co. to launch its first Fraser Place property in Chengdu. The company is also opening two properties in Bangkok, Thailand, both part of the new $3.9 billion mixed-use development, One Bangkok, developed by TCC Assets, a subsidiary of Thai conglomerate TCC Group. Frasers Property is also a member of TCC Group.
“The management business is highly scalable, and management fees contribute significantly to our annual revenue,” says Eu.
Over the next four years, Frasers Hospitality plans to open 20 new properties, including nine developments scheduled to open within the next two years. While the company will continue to focus on established markets and gateway cities, it is also exploring opportunities in emerging markets such as Indonesia, Cambodia, Vietnam, Malaysia, and the Middle East. In February, it opened its third property in Bahrain, Fraser Suites Al Liwan Bahrain, in partnership with Bahrain-based real estate developer Seef Properties.
Eu believes there are plenty of opportunities for Frasers Hospitality to partner with local businesses to manage and expand their portfolios in the Middle East region. In addition to its signature brands, Frasers Suites and Fraser Residence, the company is also exploring other opportunities for expansion, including its Capri brand. Additionally, Eu sees significant potential for growth in the long-stay lodging market, given the current challenges in the residential rental market in many major cities.
In 2027, Frasers Hospitality will open its first premium serviced apartment in Taipei, Taiwan, when it launches Frasers Residence Taipei in the Beitou district. The property is a partnership with Taiwanese real estate developer Hung Tai Group. A year ago, the company partnered with US real estate group Tishman Speyer and Asian real estate investment firm Alyssa Partners in China and Japan, respectively, acquiring and developing two new properties in Shenzhen and Osaka. Collectively, these properties will add 449 rental housing units to Frasers Hospitality’s portfolio.
Eu believes that long-stay accommodations are a highly resilient and attractive asset class, with less income volatility than hotels. The company is also exploring ways to enhance its brand offerings by providing unique experiences and local touchpoints for guests, catering to the growing trend of travelers mixing business and leisure travel. “Travellers are now willing to pay a premium for high-quality accommodation experiences, and this is the direction that Frasers Hospitality is headed towards,” says Eu.