Hospitality Development Design Construction - Issue 4

Development Design & Construction issue 4 | October 2011

PROFILE SPACE ARCHITECTS

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hotel advisers

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Development Design & Construction

M-Mode Sathorn courtesy of Space Architecture

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Summary News from around Asia

Hotel Asset Management with Claas Elze Apara Hotel Advisers

Designer Profile Mark Pulsirivong and Space Architects

Web Watch

This week we featuring talented designer Mark Pulsirivong and Space Architects and chat with Claas Elze of Apara Hotel Advisers to find out more about hotel asset management.

These are exciƟng Ɵmes as we look to launching D|D&C TV in the next week. D|D&C TV will feature interviews with the developers, designers and sneak peaks at projects around the region.

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Floods And New Regulations To Change Bangkok Property Market

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ogether with new city planning regula ons, the recent flooding that con nues to affect Thailand is likely to have various implica ons for the Bangkok property market once the waters recede. While the new regula ons are designed to improve the poorly planned urban sprawl that has seen the city grow from 2 million in 1960 to 10 million today, the floods have served as a reminder of the dangers facing the city.

Although Bangkok’s current city planning regula ons expired in May, they were extended for an extra year un l the new dra regula ons are finalised. One of the main features of the new regula ons will be to concentrate high-rise buildings in high density commercial zones in the city centre. Suburban areas will be subject to stricter regula ons

regarding the height and size of buildings, although there are excep ons, such as along mass transit routes.

However, the dra regula ons— currently at the public hearing phase—have caused confusion and even panic among some landowners and property developers. Concerned that new restric ons will limit the size and subsequent revenue poten al of buildings in affected areas, some developers have rushed through projects to ensure they get underway before the new regula ons come into effect.

The regula ons are also likely to have a big influence on land prices. Depending on where a plot of land is located, it could decline or increase in value once the regula ons are implemented. The biggest winners

Understated Luxury

are likely to be owners of land next to any road more than 16 metres wide as well as main roads in the city centre or next to the fast growing mass transit network.

One of the results of the current flooding is likely to be an increased demand for condominiums. While many of Bangkok’s suburban residen al areas have been inundated by the floodwaters, the centre of the city has largely been spared so far as the government works hard to protect commercial interests.

With a rise in demand for highrise condos expected, there has been an increase in the number of requests submi ed by developers for high-rise permits in the city. 

www.linuxxoffice.com

www.riverbirches.co.nz

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Under the agreement, Hanwha China will be responsible for developing the spa resort’s overall concept, planning the construcon plans, and overseeing the implementa on of those plans.

Yida Group will be in charge of the actual construc on. The project will include the development of recrea onal facili es, a water park and a golf course. 

Phuket Property Sold Out In 3 Hours

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Macau To Decide On Reclaimed Land Use

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he Macau government has submi ed for public consulta on two proposals on how best to use 361.65 hectares of reclaimed land for urban development. Reclaimed at a cost of MOP 7 billion and due for comple on in 5 years, the land will be used to create 5 new urban areas – two in the Macau peninsula and three in Taipa. However, the exact use of the land is yet to be determined.

In the first proposal, 100,000 people will be housed in 33,000 public and private housing units.

The second scheme proposes the construc on of 43,000 apartments to house 43,000 people. Both proposals include venues for cultural, tourism and conven on purposes, as well as healthcare and educa on facilies, community and social serv-

ices buildings, sport facili es, administra on buildings, and various other public infrastructure projects. However, one type of development that will definitely not be considered is gaming. 

Korea’s Hanwha Group To Work With Yida Group In China

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orea’s Hanwha Group is to increase its presence in China following the signing of a Memorandum of Understanding between its Chinese business arm, Hanwha China, and China’s Yida Group to develop a hot-spring resort in the Longmen leisure complex in Dalian, Liaoning Province.

ll 566 units of the dCondo project launched by Thai property developer Sansiri in Phuket last month sold out within three hours of going on the market. Despite the three 8-storey buildings being located far from the island’s famous beaches, and even though none of the condos were larger than 30m2, all had sold out by 10am a er being made available just three hours earlier.

Located in the town of Kathu, the condos share a communal swimming pool, gym and garden, but are small and basic with just a combined living room/bedroom/kitchen and separate bathroom. With the units priced between 900,000 Baht (US$ 29,152) and 1.4 million Baht (US$ 45,347), an es mated 30% are believed to have been bought by local investors looking to sell them on later for a profit. Bouyed by the success, Sansiri is set to launch two new projects in Phuket: Habi a, a collec on of semi-detached houses; and Habitown, a complex of two storey townhouses.

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Two More Favehotels For Malaysia And Indonesia

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ston Interna onal is to take its por olio of budgetbrand favehotels to five with the opening of two new proper es on the resort islands of Bali and Langkawi this month. The 251room favehotel Seminyak in Bali will include a swimming pool, coffee shop, and several small

mee ng rooms. The 97-room favehotel Cenang Beach will be located on the Malaysian island of Langkawi and will feature a coffee shop, bar and lounge, outdoor swimming pool, spa, and three mee ng rooms.

Aimed at the young and fashionconscious, the two new hotels

will add to Aston’s three exis ng favehotels in Jakarta, Surabaya and Denpasar. The company also plans to open favehotels in Solo, Balikpapan and Bali early next year as it looks to con nue growing the brand in Malaysia and Indonesia.

Suntec Set For Major Makeover

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Singapore’s BIM Needs Private Sector Support

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s Singapore’s Building and Construc on Authority’s (BCA) looks to adopt the Building Informa on Modelling (BIM) system, an interna onal panel of experts has come up with a list of recommenda ons to support its smooth and effecve implementa on in the city state.

BIM is a 3-dimensional modelling technology that aims to promote more sustainable designs and higher construc on producvity by enabling professionals to work on a building project in

a digital format before the actual construc on phase begins.

To ensure BIM is introduced successfully, one of the key factors proposed by the panel of experts is the ac ve par cipaon of the private sector. In parcular, the need for collaboraon between the public sectors of different countries in sharing best procurement policies, standards, and processes was stressed.

The experts also proposed the establishment of a na onal digital library as well as the use of

RA Trust Management—the managers of Suntec Real Estate Investment Trust—is to invest S$410 million (US$326 million) on renova ng and upgrading the Suntec Interna onal Conven on Centre and Suntec City Mall in Singapore. Star ng in mid-2012, the development will cover four phases and is set for comple on in 2015. The plans include the redesign of the MICE venue and mall as well as the addi on of new event, retail, and F&B areas. New technology will also be incorporated to support the media requirements of future events.

incen ves and awards to mo vate the use of BIM by building professionals. Finally, the role of social media was highlighted as a way of encouraging the next genera on of building professionals to get involved.  D|D&C | 5

Ho Chi Minh City’s 15-Year Plan

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he Vietnamese government is set to unveil the details of its 15-year construc on master plan for Ho Chi Minh City. Approved by the prime minister last year, the details of the plan are set to be presented to the public at an upcoming exhibion.

Highlights of the plan include transporta on, water management, and urban development projects to accommodate the city’s projected popula on growth to 10 million by 2025.

The developed city will feature 19 districts, including 6 new ones, with new financial and trade centres also planned.

There will also be a total of 19 bridges and 3 major new ring roads in the city, while several new railway lines and elevated monorails will be built to ease conges on. Vietnam Property Market To Bounce Back In 2 Years

Just a few years ago, the property market was booming in Vietnam. Between 2005 and 2009, funds were flowing into the country from all over the world as countless developers looked to hitch a ride on one of Asia’s fastest growing “ gers”.

But that was then and this is now. Today, developers can’t get the funding to finance their projects and the property market has slowed to a crawl as rising consumer prices, a weakening currency, and a ght credit policy have all taken their toll.

Yes, the property market in Vietnam is in a rut right now, but— like most things—it is cyclical.

And there are signs that the de is slowly turning. A er peaking

at 23% in August, Asia’s highest rate of infla on has slowed for the last 2 months. And even though the central bank raised its refinancing rate from 14% to 15% while maintaining its base interest rate at 9% to achieve this, op mists believe that the property market could be back on the up within 2 years.

So is this a good me to invest in Vietnam real estate? Considering how slowly things move in the Vietnam property development industry, now may be the best me to invest. Planning, purchasing land, obtaining construc on permits, and ge ng the necessary licensing can easily take 2 years—just about as long as the market is expected

to take to recover.

One part of the process that has speeded up is the length of me required to obtain an investment license. Provided all the necessary paperwork is in order, a process that used to take a year can now be completed in just 3 to 6 months.

And despite—or perhaps even because of—the slowdown in property projects ge ng off the ground, there is certainly s ll a demand, especially for office units where there is a current occupancy rate of 85%. So is now a good me to invest in Vietnam’s property market? If it can bounce back in two years as some predict, it could be the best me.

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China’s HNA And Spain’s NH Hoteles Form Strategic Partnership

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Gloria Increases Presence In China loria Hotels & Resorts of Gehry Looks East

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Hong Kong plans to open at least five new proper es in China over the next 6 months including a 90-room property in Shanghai under its Merlin bouque hotel brand. Scheduled to open in early 2012, the property will be located near Shanghai Hongqiao Interna onal Airport and target upscale customers including celebri es and the highly fashion-conscious.

Two 400-room resorts are also planned on Hainan Island, while there will also be two new proper es in Changsha in Hunan province. The 300-room 5-star hotel and a 200-room midscale hotel will both target the MICE market as well as catering towards family groups and European travellers.

Gloria is also expanding its affiliate programme. In November, it will add the 38-room Red Wall Garden bou que hotel in Beijing to exis ng proper es in Tokyo and Beijing. 

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ith opportuni es few and far between in the US, award-winning architect Frank Gehry is looking east for his next challenges. Having won the Pritzker Architecture Prize in 1989 and including such masterpieces as the Walt Disney Concert Hall in Los Angeles among his achievements, the 82-yearold recently unveiled the design for his first Australian building and is currently compe ng for projects in China and India.

Although Gehry refused to give the details of the projects currently under tender, one is known to be for a museum in one of China’s booming ci es, while the other was described

by Gehry as a “very spiritual kind of a building” in India.

However, one Gehry project that won’t be going ahead in Asia is the Guggenheim Abu Dhabi museum, which was brought to a halt last month after almost 6 years of work as the emirate looks to scale back on some of the ambi ous plans it made before the financial crisis of 2008.

hina’s HNA Hotel Group has formed a strategic partnership with NH Hoteles of Spain to create a brand new hotel management company and introduce a new interna onal business hotel brand into the Chinese market. The partnership was established a er HNA invested 430 million euros (US$609 million) to acquire a 20% stake in NH Hoteles.

The first collabora on between the two hotel groups is a 210-room hotel set to open in Chongqing early in 2012. The property is owned by HNA but will operate under an NH brand and will be jointly managed by the new hotel management company formed as part of the alliance.

While NH currently has 400 hotels in 25 countries, the new property will be the Spanish company’s first in Asia. Addional NH-branded proper es are already planned for Beijing and Nanjing with more to follow.

HNA is also looking to con nue the expansion of its own Tangla Hotels & Resorts brand. Having opened its first Tangla property in Beijing in 2009, the company has established three dis nc ve sub brands catering to the luxury, bou que, and business hotel markets. There are plans to open new proper es in Sanya, Haikou, Shenzhen, and Beijing before the end of 2011.  D|D&C | 7

Captavalue Homes Secures Two New Sites In China

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apitaValue Homes, a member of the Singapore-based CapitaLand group, has secured two new sites in China for residen al development. With a combined area of 156,627 square metres, the two sites are located in Guangzhou and Shanghai and were bought in government land tenders at approximately S$61.82 million and

S$46.02 million, respec vely.

Around 2,400 new value homes will be built on the two new sites to add to the 2,600 value homes already planned for construc on in Wuhan. In addi on, CapitaValue Homes has another three projects in the pipeline in Ho Chi Minh City, Vietnam. 

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para

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hotel advisers

we caught up with Claas Elze of Apara Hotel Advisers to learn more about hotel asset management

What does Apara do?

Apara Hotel Advisers is a hotel asset management and advisory firm that provides services to existing and potential hotel investors, owners and developers throughout the Asia/ Pacific region. Our services can be broken down into two key areas: 1) pre-opening and post-opening hotel asset management where we provide oversight to the hotel owner in their commercial dealings with a third-party hotel operating company, and 2) hotel operator searches and management/franchise contract negotiations where we provide assistance to hotel owners throughout the development process in structuring a deal with the appropriate operator/brand for their site/ hotel.

How do your services benefit your clients?

Claas Elze | Apara Hotel Advisers

We represent the owner’s interests in the relationship with the third-party operator. In doing so, we are present throughout the entire life cycle of a hotel, including the planning, development, acquisition (or potential disbursement), and

operations phases, where we bring our extensive experience in both transactions and operations to the table in order to reduce costs, improve the hotel’s revenues, streamline the operations, review operating and capital expenditure budgets and deal with other operations-related issues associated with a hotel. Our team of six industry professionals brings together a cumulative 80 years of global hotel experience from all aspects of the hotel asset class, including development, planning, feasibility, pre-opening, opening, operating, readying for sale and sale of the asset. Owners have the benefit of: • • • • •

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a strategic consulting partner for all decision making our proven ability to assert operational discipline our understanding of the non-construction pre-opening costs and requirements prior to the opening of a hotel our strong relationships and credibility with senior executives within operating companies our knowledge of the intricacies of managing hotels and ability to build relationships and influence the management of those hotels to improve bottom line performance (cash flows) and develop the value of the property a wide pool of operators to choose from when it comes to the Operator Search process competitive management terms based on our extensive transaction experience across many international operating companies our detailed market knowledge in the Asia/Pacific region D|D&C | 9

• • •

our proven ability to close on transactions a strong understanding of hotel operating companies a solid understanding of the current and changing hotel development landscape across Asia with an ability to respond quickly

What are the biggest challenges to the provision of your services?

Our form of advisory service is relatively new in Asia, hence, the awareness is not present. In more mature hotel markets, such as Europe and North America, the existence of such services has been present, established and accepted for many years. A significant part of our endeavors includes educating the market about the benefits of professional hotel asset management.

If you were an owner what would you be looking for in a company like yours?

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A proven track record of performance An experienced team that you trust to effect change, where required, in a systematic and reasoned approach, and A strong and positive relationship with your adviser’s team as the most productive working relationship involves frequent interaction.

If you are an owner, how would you select a hotel operator? What are the steps you consider essential to be carried out?

We believe that selecting the right brand and negotiating a competitive management contract are critical to achieving optimum investment return and asset value. While often the various hotel operators are viewed as a “commodity”, we believe that there is such a thing as an “optimal” operator for a particular hotel. With countless hotel brands and products in the market, the task of choosing the right brand continues to be an increasingly complex challenge for even the most experienced hotel owner and developer.

(different operators may add varying degrees of value to a hotel based on their size, facilities, locations, market orientation and so forth); consider all the contractual options and positions, as well as management contract formats, operator fees and performance criteria, and systems to oversee and reward operator performance.

Finally, it is critical to understand how the owner–hotel operator relationship functions in practice as both sides do not always have the same objectives, which inevitably results in friction in this relationship.

Do clients tend to be receptive of your services, if not why not?

In the past 18 months, we have found that hotel owners in Asia are very receptive to our services. Since incorporating in May 2010, we have grown to a team of six industry professionals based in Singapore and Hong Kong. As of October 2011 we are asset managing 27 properties (most flagged under the major international brands) and have been involved in 25 hotel operator searches.

What are some mistakes you have seen clients and owners make?

Some of the most common mistakes that we have seen are: • Owners being less disciplined in terms of their initial investment than a market opportunity would warrant, which in the best-case scenario yields lower than expected returns and in the worstcase scenario destabilizes the financial footing of the owner.

• Engage an operator that does not add the required value to the investment.

• Enter into a management agreement on terms that don’t allow an owner to effectively “manage” the operator.

• Hotels are complicated and volatile assets, hence, we recommend both first-time and experienced owners to engage the right professional expertise to assist them throughout the hotel life cycle. 

First of all, it is critical to understand the costs involved in a hotel investment and measuring this against the potential returns in order to structure a viable investment.

Further, it is vital to understand brands, qualifications and capabilities of the various hotel operators

www aparahoteladvisers.com

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in search of

SPACE ARCHITECTS

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nlike his father, renowned Thai civil engineer Sindhu Pulsirivong , Mark Pulsirivong has turned his attention to architecture and the arts.

Having established Space Architects, a Bangkok- based design practice over 10 years ago, Pulsirivong and his company have produced a wide ranging portfolio including sports facilities, buildings for the transportation industry, and hospitality projects.

Highly dynamic and creative Pulsirivong—as the principal designer—produces the conceptual designs of all schemes produced and realised in the studio. Inspired by vast and varied interests, each of the designs reflect his vision to design a space that is not constrained by any one notion, style or trend but that takes inspiration from the actual brief, the context, the site, and, importantly, the clients themselves.

Pulsirivong and his team focus on the challenge of creating designs that are inspired and fresh and that manipulate all the spaces and buildings to positively enhance the experiences of their users.

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PROFILE | SPACE ARCHITECTS The InterContinental Hotel, Hua Hin, Thailand

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ealised in partnership with an international design consultancy and another local architect, the concept for this 5-star resort was to evoke the luxury and ambience of a palace by the sea. Hua Hin has been for many years the seaside destination for the Thai Royal family and we sought to re-interpret the old-style summer

pavilion, complete with carved wooden screens and shutters, but in a modern language and scale. The site itself was long and narrow and inspired the inclusion of an undulating internal park, inspired by the curves of a fish, and and waterscapes created a flow to the beachfront.

Phuket Marina, Phuket, Thailand Feasibility Study and Concept Design 2007

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his scheme was a feasibility study and concept for a marina in Phuket, involving a hotel, holiday type apartments, a clubhouse, and a marina. Although it was never realised, it remains one of our favourite schemes as it clearly indicates our design philosophy - how we are primarily inspired by the client’s brief and the site itself. Taking the concept of boats loosely and randomly moored, the buildings take on nautical shapes and in their positioning we created a soft but energetic and rhythmic character to the site.

Sala Samui Resort, Samui Island, Thailand

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he inspiration for this holiday resort came from a nostalgic view of a gentle and relaxed life-style characteristic of a bygone era of community living, albeit including the trappings of modern day luxury. Therefore our concept was for a village of old-style villas with white-washed walls, clay-tiled roofs, and deep balconies. We balanced open public green areas with private walled pools and terraces, and in keeping with the client’s vision, created an atmosphere of seclusion and rest where it was needed in the individual units, but one of interest and liveliness in the amenity areas. 

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Web Watch Innovation we watch the web for the latest, the most innova ve in design & construc on

RECOMMENDED WATCHING ON FULL SCREEN The Third & The Seventh A FULL-CG animated piece that tries to Watchillustrate this week’s favouriteart twoacross films a photoarchitecture graphic point of view where main subjects are already-built spaces. Sometimes in an abstract way. Sometimes surreal http://vimeo.com/7809605

Architecture This is a short film by MAYA Design about architecture in its broadest sense. http://vimeo.com/3248803

LAUNCHING NEXT WEEK D|D & C TV Coming Soon WATCH THE LASTEST DEVELOPERS DESIGNERS AND BIG NAMES OF HOSPITALITY DESVELOPMENT | DESIGN & CONSTRUCTION

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