Hyatt way to diversify
UEM Sunrise ventures into hospitality sector
WITH the soft property market currently seeing developers struggling to sell their units, many are turning to unique ways of clearing off their inventories and maintaining profit margins.
For UEM Sunrise Bhd, its tie-up with Hyatt is seen as an opportunity to venture into the hospitality sector and diversify its property development business, says managing director and chief executive officer Anwar Syahrin Abdul Ajib.
“Going into this, it’s an opportunity for us to explore other forms of income for the company,” he says at the opening ceremony of Hyatt House Kuala Lumpur (HHKL) in Mont’Kiara earlier this month.
HHKL is part of UEM Sunrise’s Arcoris Mont’Kiara development which has a gross development value of RM1.2bil. Anwar emphasises that having a reputable partner is crucial, especially when it comes to business diversification.
“When you talk about real estate for lifestyle, we feel that this is something that we want to explore and the fact that we have Arcoris, having a hotel component to it allows us to go into this – and it was very important for us to get the right partner with the right brand, because we can’t afford to get it wrong.
“While the property sector might be a bit soft in general, when it comes to product and development, people will still buy when something is very exciting.”
And given the current property market glut, Anwar emphasises that it is crucial for a developer to “keep coming up with something” to keep our sales strong.
“For us, we also wanted to offer a unique opportunity to reside within an enclave like Mont’Kiara. There are a lot of nationalities living in this area so people might come here for a month or two for their work assignments and there are plenty of those.
“Industries are now cutting down on overheads and they do more on these type of engagements to address specific needs within their business.”
Anwar points out that when people come to Malaysia for a month or two, they may not want to live right smack in the middle of the city.
“They may want to feel what it’s like to be a KL-ite. The things that are available within Mont’Kiara, such as the food and beverage outlets, the nice pathways, shopping malls, supermarkets and the various amenities... It provides that attraction to come and experience the life of a local living in Kuala Lumpur.”
HHKL general manager Bennett Peter points out that Mont’Kiara is one of the most sought-after address within Kuala Lumpur.
“Mont’Kiara has always been one of the first choices when you’re looking to move into Kuala Lumpur and industries that relocate here are testament to that. A good example is the Malaysia International Trade and Exhibition Centre, which is located just five minutes away from HHKL.
“For those looking to experience life living in the Kuala Lumpur suburbs, Mont’Kiara captures that trend perfectly.”
HHKL has 298 guestrooms, comprising 450 sq ft studios as well as one- and two-bedroom suites of 480 and 750 sq ft, respectively.
The published rate for the studio is RM400 per night, while the suites range from RM450 to RM550 per night.
The rates however fluctuate on a day-to-day basis, depending on the number of nights the guests stay.
Given the competitive environment currently as a result of the sluggish property market, Anwar says HHKL provides unique services compared with other hospitality-based businesses within the Mont’Kiara area.
“I think this is a very complimentary offering. You can come and stay here for a day or a week. Most of the other units on offer for rental, they’re more medium stay.
“But I think at the end of the day, it’s a consumer’s choice about what they want. In this day and age, you have the likes of AirBnB kind of offerings so there are a lot of things that people are putting into the market.”
Anwar adds that having a well-renowned brand also helped differentiate it from others.
“Tourists... When they come to Malaysia, they may not know what to look for. Therefore, they will need to browse through websites and look at comments to decide what they want. But when you have a brand like Hyatt, you will know what exactly we’re offering.
“It comes down to level of comfort and what you’re willing to pay. What we’re offering will “up the game” within the area. We’re more service-orientated and more customer-focused. In general, it might go either way, but we want to ensure that there are enough offerings to cater to different markets within the Mont’Kiara area.”
Hyatt Hotels & Resorts Asia Pacific full service franchise operations and Hyatt Place / Hyatt House regional vice president Michael Koffler says HHKL is looking to expand its presence in Malaysia.
“There’s another project that’s under design here in Malaysia. I can tell you now that in my region, which covers everything from North China to Australia, there are over 80 projects that are under construction design, development and final contract negotiations.
“It’s an incredibly hot part of the world in terms of business expansion and travel and it’s something that we’re very excited to be a part of, as people begin to travel more interstate and intrastate.”
Anwar says UEM Sunrise may consider expanding further into the hospitality business if it provides viable opportunities.
“It’ll be on a case-to-case basis. If you look at what we have, a lot of it is still going to be within our core business of property development, so we’ll see how this one goes.
“Of course in Johor we have Puteri Harbour, where there is a need for more hotel rooms as more facilities are being built. If we proceed with our plan of having a convention centre, as an example, which we’ve not committed to yet, there will be a need for more hotel rooms.”
For the time being, Anwar says UEM Sunrise doesn’t have any hospitality ventures going into 2019.
“It’s all focused towards our core business of property development as well as our role as master developer in Johor. But we’ll be monitoring this venture closely and will look for more opportunities in the future.
“We have a prime piece of land opposite KLCC and we would really like to explore what we can do with that. Having the experience here (with HHKL) will probably help us to do better in this sector of the market.”