IGB plans hotel in Australia

IGB Corp Bhd plans to build a hotel in Australia within 18 to 24 months should it succeed in securing the project.

Group managing director Robert Tan said the hotel, located in the heart of Sydney, was expected to carry the St Giles international hotel brand name, similar to its hotel in London.

“We have tendered for this project. We have not got the property yet and we are looking for other investments as well,” he said after the company AGM yesterday.

Robert Tan

Tan said IGB intended to manage the hotel, as it did with its hotels in Malaysia. It would be a three- to four-star hotel, he said, adding that the company picked Australia for the country’s good occupancy rates and stable political environment.

The property player, he said, was also eyeing emerging markets in Eastern Europe as part of its investments abroad.

Tan said IGB’s MiCasa All-Suite Hotel in Yangon, Myanmar was charting at least 80% in occupancy, as that country was experiencing strong arrivals of Chinese and Indian tourists.

“The business there is quite promising. Hopefully there will be more efforts to promote tourism there,” he added.

On the local front, Tan said Visit Malaysia Year 2007 had boosted occupancy rates, leading to a growth of 10% to 15% in the group’s bottomline.

“The hotel occupancy rates have been going up steadily since last year, mostly from local traffic,” he said.

Cititel Hotel has an occupancy rate of about 85% to 90% and the Renaissance Kuala Lumpur, 75% to 80%.

On the sale of Renaissance, Tan said there were many interested parties, mostly foreigners, but the offers received were below IGB’s target price.

“There are a few parties doing due diligence now, but there is nothing to report at this juncture,” he said but declined to disclose the target price.

On the traffic situation in Mid-Valley City, Tan said IGB had to date spent RM500mil to improve the area’s linkages and expected the link to the Abdullah Hukum Putra LRT station to be ready in a few months.

“We are ready to work on this link and are awaiting approvals from the authorities. We hope to complete it in time for the opening of The Gardens in September,” he added.

Tan said the link would consist of a pedestrian walkway and a travellator. IGB is also increasing parking space in the area to 14,000 bays by year-end from 9,000 currently.

In a filing with Bursa Malaysia, IGB announced a net profit of RM33.4mil for the first quarter ended March 31, against RM27.9mil in the previous corresponding period.

Revenue, however, fell marginally to RM141.7mil from RM147.1mil on lower contribution from the property division but this was mitigated by higher profits from its hotel business as well as an exceptional gain from the disposal of investments.

Source : STAR
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