Frasers Hospitality, the hospitality and lodging business unit of Frasers Property, has been strategically shedding some of its Singapore assets while expanding its presence abroad this year. According to Eu Chin Fen, the newly appointed CEO of Frasers Hospitality since January 2023, the company is always looking for opportunities to recycle and redeploy capital in order to grow its international footprint in the coming years. Earlier this year, a consortium led by Hong Kong-based family office Atelier Capital Partners acquired the 313-key Capri by Fraser, Changi City hotel for $170 million, which translates to $543,131 per key. The property has since been rebranded as the Dorsett Changi City Singapore, with Dorsett Hospitality International (DHI) as the operator. DHI is a subsidiary of Hong Kong-listed Far East Consortium International, one of the shareholders in the consortium, along with Singapore-listed Heeton Holdings and Singapore family office Fortez Capital.
In addition, Frasers Property sold the 313-key hotel Capri by Fraser, Changi City for $170 million, or about $543,131 per key. The hotel, which was originally part of a mixed-use development that included the Changi City Point shopping mall, was opened as a Capri in 2012 and was sold to Frasers Property in 2014 for $203.4 million. The property sits on a 60-year lease awarded by JTC and has a remaining lease of 45 years. In March of this year, Frasers Hospitality Trust (FHT), which had the right of first refusal, turned down an offer from its sponsor, Frasers Property, to purchase the property. As a result, Frasers Property sold the asset to a third party.
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According to Eu, “Real estate is a cyclical business, and as a portfolio manager, it is essential for us to recognize which of our properties have reached the end of their capital cycle and identify opportunities where we can recycle that capital into other profitable ventures.” In May, the Fraser Residence River Promenade was sold to Singapore-listed Tuan Sing Holdings for $140.889 million. With 72 serviced apartments, the price translated to $1.96 million per key. The serviced apartments, which are situated on Jiak Kim Street, opened in September 2023, and are housed in a new four-story block that is part of a mixed-use development that includes Frasers Property’s 455-unit luxury condo Rivière, which was completed last year and fully sold.
Established 26 years ago, Frasers Hospitality now manages more than 16,000 serviced apartments and hotel rooms in 20 countries. Frasers Hospitality owns and operates six different hospitality brands, ranging from its namesake Fraser Suites, Fraser Residence, and Fraser Place to Capri by Fraser, Moderna by Fraser, and Malmaison, which it acquired in 2015. According to Eu, “We are well-known internationally as a premium serviced apartment operator, and we have proven that we can deliver value to the assets we manage.”
Given the challenging global environment and rising operational costs, Frasers Hospitality is now widening its presence in existing markets through partnerships with established local players to grow its revenue contribution from management contracts, states Eu. In the first half of 2024, the group opened three new properties in Bahrain, Chengdu, and Shanghai. An additional nine properties are scheduled to open in the next two years across China and Vietnam. So far, eight new management contracts have been announced this year. Three of these properties are located in Shanghai, including the 210-key Fraser Place Wujiaochang Shanghai, which opened in June, the 307-key Modena by Fraser Wujiaochang, which will open next year, and the 205-key Fraser Place Pudong Shanghai in 2027.
In addition, Frasers Hospitality has also partnered with Chinese developer Poly (Sichuan) Investment and Development Co to launch its first Fraser Place-branded project in Chengdu, China. The 238-key Fraser Place Chengdu opened its doors in March, offering a mix of studios and three-bedroom serviced apartments. Furthermore, the group will be opening two new properties in Bangkok, Thailand: the 261-key Fraser Suites Bangkok in 2026, and a 210-key white-label serviced apartment. Both properties are located within the new US$3.9 billion ($5 billion) mixed-use development One Bangkok, which is developed by TCC Assets, a subsidiary of Thai conglomerate TCC Group. As it happens, Singapore-listed Frasers Property is also a member of TCC Group.
According to Eu, “Our management business is scalable, and the management fees it generates continue to contribute significantly to our overall annual revenue.” Furthermore, over the next four years, the group plans to open another 20 properties, including the nine scheduled to open over the next two years in established markets and gateway cities. However, the company is also exploring opportunities in emerging markets such as Indonesia, Cambodia, Vietnam, Malaysia, and the Middle East. For example, in February, Frasers Hospitality opened its third property in Bahrain, the 63-key Fraser Suites Al Liwan Bahrain. These serviced apartments are part of a mixed-use project with residences, commercial, hospitality, and entertainment components. This project was developed by Bahrain-based real estate developer Seef Properties.
Eu says, “Within the Middle East region, we see many opportunities for Frasers Hospitality to work closely with local partners to help manage and grow their portfolio of long-stay lodging assets.” Beyond the signature brands of Frasers Suites and Fraser Residence, Eu sees potential in the Middle East for other flags under the group’s umbrella, such as Capri. Typically, demand for lodging in the Middle East arises from project teams that travel there to work on short 1-2 month intervals or from professionals who regularly visit the region, such as consultants. Therefore, she sees the potential for the company’s serviced apartment business.
Furthermore, Frasers Hospitality is also optimistic about the long-stay accommodation segment, given the challenges in the residential rental market across many major cities, with demand far outstripping supply. According to Eu, “Our capital partners are also eager to invest in premium accommodation assets.” In 2027, Frasers Hospitality will open its first premium serviced apartments in Taipei, Taiwan. The Fraser Residence Taipei, which will feature 200 serviced suites, is located in prime Beitou district. It is being constructed in partnership with Taiwanese real estate developer Hung Tai Group, with Frasers Hospitality set to manage the serviced residences once completed.
In May 2023, Frasers Hospitality formed partnerships with US real estate group Tishman Speyer and Asian real estate investment firm Alyssa Partners to acquire rental housing units in China and Japan, respectively. This deal gave Frasers Hospitality a portfolio of 449 rental housing units in Asia’s two largest economies. The combined acquisition cost for these two properties was $170 million. Furthermore, the group is also working with Yotel to launch Japan’s first Yotel property in Tokyo in early 2025. The site was acquired and developed by Frasers Hospitality and is located within walking distance of Tokyo Station, with dining, shopping and entertainment amenities nearby.
In conclusion, Eu is confident that the long-stay lodging segment will continue to perform well due to its greater resilience and capacity to generate predictable income compared to hotels. Therefore, Frasers Hospitality is now rethinking its brand proposition, particularly its long-stay brands. She feels that it is time to offer more unique experiences beyond traditional hospitality services, particularly given the increasing trend of people mixing business and leisure into a single trip. According to Eu, “Travellers are now willing to pay premium rates for hospitality experiences that combine quality and value with memorable local touchpoints. This is the direction that Frasers Hospitality will head towards.”