CHIP Eng Seng (CES) yesterday appointed Park Hotel Group (PHG) to manage its first hotel property, part of its mixed development project at the junction of Alexandra Road and Jalan Bukit Merah.
The 10-year agreement between CEL-Alexandra Pte Ltd, a wholly-owned subsidiary of CES, and PHG, will see the hotel group providing a full spectrum of hotel management services, including consultancy on the design and construction of the new-build hotel.
Inclusive of the land cost, CES will be investing about $350 million in the hotel project.
CES successfully acquired the plot in December last year after submitting the highest bid of $189 million in the tender for the site.
Acquisition of the land comes as part of CES’s diversification strategy into the hospitality business. It will also boost Chip Eng Seng’s recurring income. The group is involved in the construction and property businesses.
Construction of the entire development, on a total land size of 7,946 square metres, is planned to commence in the fourth quarter of 2012 with the hotel being targeted for opening in the first half of 2015.
The integrated development’s three levels of retail space will have a gross floor area of 8,900 sq m, while the 13-storey hotel will have a gross floor area of 13,349 sq m.
“When completed in 2015, Park Hotel at Alexandra will generate a regular room revenue stream while the retail podium will provide further income through sales of retail space and rental income,” said CES executive chairman, Lim Tiam Seng.
The 450-room four star hotel will offer convenient, value-for-money accommodation for business travellers, especially those visiting nearby business hubs such as one-north and Mapletree Business City, Science Park as well as the National University Hospital, National University of Singapore and Nanyang Technological University. The hotel will also cater to other regional visitors.
This is also PHG’s first foray into hotel management services, a division established in 2011 as part of the group’s expansion efforts. According to group CEO Allen Law, PHG expects to manage two more projects in the region by the end of the year.
“Having competed against bigger international hotel chains to clinch this deal, we believe this is indicative of the industry’s confidence in our hotel management expertise and capabilities,” said Mr Law.
Source: The Business Times, 16 August 2012, By Zeinab Yusuf Saiwalla