Tycoon eyes more rooms on east coast
Fresh from opening his latest Sydney CBD hotel, international billionaire hotel tycoon Michael Kum has at least two other real estate deals in play on Australia’s east coast.
“We are focusing very much in Australia. We have heavily invested about $1.5 billion,” the Singaporean-based executive chairman of M&L Hospitality told The Weekend Australian yesterday.
“The bottom line is Australia probably has lower margins relative to holding costs and yields,” said the 73-year-old, a former shipping magnate who began building his hotel portfolio in 2009.
It was also difficult finding good hotel sites in Sydney given buyers wanted to buy low and sellers typically wanted to sell high. “That makes it more difficult,” he said.
“It’s hard to buy around Australia unless you go to Darwin or somewhere less popular with tourism,” he said.
“We only have one or two projects we are working on at the moment in Australia,” Mr Kum said, adding that Australia had the bulk of M&L’s hotels, which are spread from Britain to The Netherlands, New Zealand and Singapore.
In Sydney yesterday, Mr Kum opened the new West Hotel, which is managed by Hilton as part of its Curio Collection, with the property just a few doors down from his 892-room Hyatt Regency in Sussex Street that recently underwent a $250 million extension.
M&L Hospitality also owns the Swissotel in Sydney’s Market Street, the Novotel in Perth and the Double Tree by Hilton in Melbourne’s Flinders Street, but Mr Kum stressed yesterday that Sydney and Melbourne would be his key focus for hotel acquisitions from now on, given the numbers of tourism arrivals and the extent of business activity in both cities.
Meanwhile, the Washington DC-based Curio Collection global head Mark Nogal said the boutique West Hotel was the first Curio Collection to open in Australia, but that several more were planned here.
Although the brand was launched by Hilton only 3½ years ago, there are now 46 Curio Hotels around the world with the brand similar to Hilton rival Marriott’s Autograph.
Mr Nogal said he was working with M&L Hospitality on a couple of deals in Australia, and had a couple of opportunities with some local developers.
He said the Australian market had always been popular, with Sydney one of the best cities to visit.
“I think the market has tremendous potential,” Mr Nogal said.
The 182-room West Hotel Sydney, Curio Collection by Hilton, was developed on a former electrical substation within 13 months.
Billed as a “upper upscale” property, the hotel is expected to appeal to corporate travellers and the leisure market on weekends. It is run by Jane Lyons, the former general manager of the Langham Hotel in London.
Rates start at about $300 a night. M&L paid $22.5m for the site at 65-79 Sussex Street in early 2016.