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17 Apr 2006 - Dubai, UAE
Fraser exclusively appointed by Global Investment House of Kuwait to manage 7 luxury Serviced Residences to be developed under newly launched MIddle Eastern hospitality holding company
Singapore, 17 April 2006 - Fraser Serviced Residences (Fraser) today announced the exclusive appointment by Kuwait-based leading investment bank, Global Investment House (Global) to manage the chain of Serviced Residences to be developed under a Middle Eastern hospitality holding company. Global’s launch of the newly created company will channel a US$500 million investment fund to developing the Serviced Residences Industry in the Gulf Cooperation Council (GCC) region over the next five years.
This landmark business alliance is a Serviced Residences management opportunity for Fraser to strategically expand its presence in the Middle East. The gateway cities of Dubai, Kuwait, Abu Dhabi, Doha, Riyadh and Jeddah have been identified as prime sites for the development of Global’s new hospitality holding company’s planned seven properties, offering over 1,100 individual serviced apartments. All residences will be managed by Fraser which is renowned for its globally benchmarked quality and lifestyled offerings throughout Europe and Asia. Fraser will not be taking an equity stake in the individual residences.
Elaborating on details of Fraser’s plan for the Middle East, Mr. Choe Peng Sum, Fraser’s Chief Operating Officer said: "Globally, the Serviced Residences sector is one of the fastest growing in the hospitality industry. Over the last five years, the worldwide serviced apartment market has grown at an annual rate of 40 per cent. In contrast, the hotel sector achieved an annual growth rate of 10 per cent. The Middle East, and particularly the GCC countries offer tremendous potential in the branded Serviced Residences sector."
"The strong demand for high quality, full-serviced residences within the region when pitched against a severely limited supply presents a great growth potential for Fraser. We had earlier announced our intention to play a leading role in this regional market and our recent business alliance with Globalis yet another forward step in reinforcing that commitment," he adds.
Global, having successfully established five real estate companies in the GCC region - Kuwait, UAE, Qatar and Bahrain, one of which is listed on the Kuwait Stock Exchange – will greatly benefit the newly setup company with its expertise and experience in setting up proven and successful operations and in achieving accelerated development of the planned seven Serviced Residences properties.
Commenting on Global and Fraser’s new business alliance, Mr. Omar El-Quqa, Executive Vice President of Global said: "The Middle East, particularly the GCC, is passing through a vibrant economic diversification process. The Serviced Residences sector is as yet an untapped asset class and represents a highly profitable investment opportunity for investors looking for a key branded product of international brand recognition, dedicated operators and strong financial results. We are confident that the selection of Fraser to oversee the management of the residences delivers credibility and the assurance of quality."
"Less than one per cent of the total hospitality supply in the region is represented by the Serviced Residences sector, and less than five per cent of serviced apartments in the GCC are branded. High rates of business growth, coupled with increasing corporate business travel, historic levels of investment from both government and private sectors, and a vibrant tourism sector are immense growth catalysts for serviced residences in the region," he said.
Elaborating on the appeal of Serviced Residences Mr Choe noted: "Serviced residences ‘bridge’ the niche between residential apartments and hotels. They hold widespread appeal, to business people and GCC families alike, with respect to quality of finish and design, convenience and a wide range of services. With companies throughout the Middle East looking to simplify and centralize their housing function, serviced residences provide an attractive and viable option to residential rental accommodation and hotel long stays."
According to Mr. El-Quqa, all key economic fundamentals, including a dynamic business environment, foreign investments and population growth, are in place to fuel the new demand for quality Serviced Residences in the region, a sector which is underserved.
Terming the Fraser and Global alliance as timely, Mr. Blair Hagkull, Managing Partner of RSP Group said: "The Middle East and specifically the GCC, remains relatively under-represented in the serviced apartment sector. This creates a significant opportunity, especially as the region exhibits the critical success factors such as high economic growth, increasing foreign investments, a growing tourist and business travel base, a predisposition towards international brands and a large mobile expatriate population."
The newly formed Middle Eastern hospitality holding company will be based in Kuwait City, and leading regional estate and hospitality advisory organisation, Dubai-based RSP Group will act as its hospitality advisor. The first of the planned chain of Serviced Residences in the GCC region through the Fraser and Global business alliance is expected to open to guests in 2008.