Cargills group gearing to enter hotel business?

CT Holdings PLC, the parent of the Cargills group, has invested Rs.3.44 billion to transfer lands to subsidiaries under a real estate and property development drive in Colombo and its Southern suburbs, in the process showing signs of entering the hotel industry.

In March 2017, an entity named Frederick North Hotel Company Limited had issued 31.10 million shares to Cargills for a consideration of Rs. 10 per share, for a total of Rs.311 million, thereby becoming a fully-owned subsidiary of Cargills.

Prior to this, two Cargills directors had been directors of the Frederick North Hotel Company since 2012, being a related company, but not a subsidiary.

At the end of March, Frederick North Hotel Company held a 2.5-acre land in Boralasgamuwa. The fair value of the land was Rs 308 million. It had four buildings, with a building extent of 23,168 square feet (sq. ft.).

CT Holdings subsidiary CT Properties Lakeside (Private) Limited also owns a 43-acre land in Boralesgamuwa, with one 11,400 sq. ft. building, and is valued at Rs.1.2 billion. The group also has significant real estate holdings in the neighbouring township of Piliyandala.

The new subsidiary is named after Frederick North, who was the first Governor of British Ceylon, between 1798 and 1805. North had lived in a Dutch building on a land which would later be occupied by the iconic Fort Cargills Building.

This has created a link for Cargills, which was acquired by the current management in 1981.

CT Holdings has completed several property development projects in retail, the Empire luxury apartment complex, and a township project in Piliyandala.

Some of CT Holdings’ recent ambitious property development plans, such as converting the Fort Cargills Building into a super luxury retail destination akin to Harrods in London, and the plans to develop a condominium project in partnership with Singapore’s Keppel Land, never took off the ground.

This March also saw Cargills investing Rs.2.35 billion in a fullyowned subsidiary Dawson Office Complex (Private) Limited— dormant since establishment in the 2011 financial year—which has held a 94-perch land in Colombo 2 for several years with a fair value of Rs. 800 million.