HVS E-Newsletter, Asia Pacific - 10 May 2002

6 May 2002 - South Korea lost the title of Japan's No. 1 foreign tourist spot to China for the first time last year, attracting 2.37 million Japanese tourists, 0.3% less than the 2.38 million Japanese who visited China, according to the Korea National Tourism Organization (KNTO). Japanese arrivals to China increased by 17.4% in 2001 compared to 2000 levels whilst Japanese arrivals to Korea declined by 21.7% over the same period.

6 May 2002 - Foreign tourist arrivals to Thailand increased by 7.2% in the first quarter of 2002 compared to the same period in 2001 to reach 2.8 million visitors. According to the Tourism Authority of Thailand, this was due to a 19% increase in tourist arrivals during Chinese New Year celebrations.

6 May 2002 - The Westin Chosun Hotel has filed a complaint with the Korean Commerce Arbitration Boar d to seek 2.29 billion won (US$1.77 million) in damages from the Incheon International Airport. Westin Chosun, which runs five restaurants on the airport's fourth floor, said that the airport allegedly breached a bilateral agreement to give the hotel exclusive rights for restaurant operations on the floor. However, the airport allowed the Walkerhill Hotel to open four restaurants last June. Officials at the airport denied having given any exclusivity rights to the Westin Chosun.

7 May 2002 - Granite Industries Bhd said that it is selling its investment holding firm Diamond League Sdn Bhd (DLSB), hotel and resort management unit Granite Hotels and Resorts Sdn Bhd and dormant company Kensen (China) Ltd to investment-holding company MDSB Sdn Bhd for MYR 50 million. The proposed sales exclude the subsidiaries of DLSB involved in the hotel business, namely Mashyur Mutiara Sdn Bhd, Home and Hotel Holdings Sdn Bhd, Accruvest Hotel Management Sdn Bhd and Vital Orient Sdn Bhd. It is anticipated that these hotel companies will be sold later in the year for MYR 200 million to raise funds for Granite's proposed acquisition of Bayou Bay Development and Tebrau Bay. Separately, Granite said that its unit Langkawi Airport Hotel Sdn Bhd would issue 4,999 new shares to Ekran Bhd to capitalise part of its debts owed to Ekran, adding that upon completion of the issue, Langkawi Airport would cease to be a unit of Granite.

7 May 2002 - Construction firm and property developer Ekran Bhd said that it would acquire hotelier Langkasuka Resort Sdn Bhd (LRSB) for MYR 11.6 million and water theme park operator Aquabeat Langkawi Sdn Bhd (ALSB) for MYR 400 million. In a statement, Ekran said that it would buy the two companies from individuals Ting Pek Khiing, Asli Edi and Gilbert Asen Maju, and added that the proposed acquisitions would be funded by internally generated funds. As at end-March, LRSB owed Ting MYR 17.4 million and ALSB owed Ting MYR 38.7 million, arising from earlier property construction costs that Ting bore on behalf of the companies. Ting has agreed to waive some 60% of the debts.

7 May 2002 - The Hong Kong and Shanghai Hotels Ltd said that its hotels and properties have experienced a gradual improvement in performance in the first quarter of this year. In a statement, the company said that the average occupancy rate at both of the group's hotels in Hong Kong has edged up. In the first quarter, the Peninsula Hong Kong reported an average occupancy rate of 63%, compared to 58% the same period last year. The Kowloon Hotel achieved an average occupancy rate of 92%, up from 90% a year ago.

7 May 2002 - Singapore luxury goods retailer FJ Benjamin said that it would jointly own and operate a new chain of Manchester United concept cafes and restaurants in China and other Asia-Pacific countries. The retailer currently makes and distributes the British football club's apparel and merchandise in the region. Existing Man U cafes in Singapore and Kuala Lumpur will be phased out as the new venture progresses. The club has awarded the exclusive restaurant rights to a 50:50 joint venture of FJ Benjamin's wholly owned subsidiary and a private company controlled by Peter Lim, who owns a 23.6% stake in the Singapore retailer. FJ Benjamin said that plans call for more than 100 restaurants to be opened and that the initial investment by the two partners was S$1 million (US$556,000) each.

7 May 2002 - A total of about 61.7 million people visited major resorts or travelled to festivals in Japan during this year's 'Golden Week' spring holidays from 27 April to 6 May, according to an estimate released by the National Police Agency. Although the holiday period this year was one day longer than last year, the number of visitors was down by 2.1 million people.

7 May 2002 - The South Korean government approved a plan by Hyundai Asan Co, the main operator of the Mount Kumgang tour programme, to invest a further US$1.16 million to renovate accommodation facilities and build a bungee jumping platform at the North Korean resort. $657,000 (57%) of the investment will be used to renovate and expand accommodations, with the remainder going to build the bungee jumping facilities, the official said.

7 May 2002 - Singapore's Goodwood Park Hotel achieved a 61.2% jump in interim group net profit to S$32.3 million, chiefly due to substantial write-offs of provisions for diminution in value of its trading investments, thanks to the recovery in global equity markets during the period. Goodwood, which owns the namesake hotel along Scotts Road, the York Hotel in Singapore and the Royal Garden Hotel in London, said that hotel operating profit had declined by 16.3% to S$5.1 million. However, investment activities improved, with group operating profit rising by 9.2% to $26.7 million, mainly due to S $17.2 million write-offs of provisions for diminution in trading investment value.

8 May 2002 - Singapore's Urban Redevelopment Authority (URA) said that it received a S$288.9 million (US$159.6 million) bid for a site in a new central area by the waterfront. Glengary Pte Ltd made the tender for the 9,091 m2 site at Marina Boulevard, which also attracted a bid by Irvine Investments Ltd of S$280 million, the URA said. The URA said that the decision on the award of the tender would be publicised at an unspecified date. The site on reclaimed land can be developed for commercial, residential or hotel use. It has a plot ratio of 13 times its site area, allowing the developer to build a maximum of 118,182 m2.

8 May 2002 - Shangri-La Hotels and Resorts is planning to open three new properties in the Gulf in the next three years. The Shangri-La Hotel, Dubai is due to open in March 2003, followed by Traders Hotel, Dubai in July 2003 and Shangri-La's Barr Al Jissah Resort, Muscat, Oman, in early 2005. Shangri-La has signed a management agreement with UAE-based Al Jaber Group to operate the deluxe five-star Shangri- La in Dubai. Its sister hotel, the 250-room four-star Traders Hotel, will open in July 2003 and operate under a management contract. The Traders Hotel is being developed by the Muscat-based Zubair Corporation, which is also developing Shangri-La's 703-room Barr Al Jissah Resort.

9 May 2002 - All Nippon Airways Co Ltd will switch to a holding company structure by the end of March 2004, in a bid to speed up decision-making and to cut costs, the Nihon Keizai Shimbun reported, citing company sources. The new ANA group structure will include a new supervisory company for three travel agencies, as well as Air Nippon Co., All Nippon Airways Trading Co., ANA Hotels Co. and other existing subsidiaries, under a holding company provisionally to be called ANA Holding.

9 May 2002 - Amara Holdings announced that it has completed a S$37 million upgrade of its flagship hotel in Singapore. The hotel, which took three years to upgrade, has been relaunched as a contemporary business hotel. In addition, an 18-storey office building called Amara Corporate Tower has been developed and the Amara Shopping Centre has been upgraded along with the hotel.

9 May 2002 - Auckland-based developers unveiled plans for a NZ$30 million seven-storey retail, restaurant and luxury hotel development taking in the council car park in central Queenstown, New Zealand. The Grand Lakes development sits on Duke Street car park, which the Queenstown Lakes District Council sold to Marcam Group for NZ$1.35 million. Marcam plans include fashion retailers, three restaurants, a day spa and a 67-room five-star hotel. Existing buildings on the site - the Ambassador Motels and the Boyd building - will be demolished. Marcam hopes the development will open by June next year.

9 May 2002 - Turkey said that it has signed a deal with Millenium & Copthorne to manage two state-owned hotels in Ankara and Istanbul and announced that it would sign a similar deal with Radisson SAS next week for two other hotels in the same cities. The deals follow an agreement with Raffles International Holdings, a subsidiary of Singapore hotel group Raffles Holdings, to manage two deluxe hotels in Turkey. No details of the pricing of the deals have been announced.

9 May 2002 - Japan's Asahi Mutual Life Insurance Co. has divested from Tokyo Realty Investment Management Inc., a Japanese REIT, the Nihon Keizai Shimbun reported. The life insurer, which is concentrating its resources in the core insurance business, apparently decided REITs aren't integral to its key operations. Asahi Mutual had a 20% stake in the Y350 million Tokyo Realty Investment Management Inc. Earlier in May, Asahi Mutual sold a 6% stake to Tokyo Tatemono, 4% to Yasuda Mutual and the remaining 10% to Yasuda Fire & Marine Insurance Co. Tokyo Realty Investment plans to apply to the Tokyo Stock Exchange for listing its REIT, aiming to debut it in June. the REIT will have initial assets worth Y100 billion and will consist of both office buildings and commercial facilities.

9 May 2002 - Keppel Land Ltd, a key player in the Singapore property market, said that it would divest more of its S$2.1 billion (US$1.2 billion) assets in the city state, while putting more focus on its housing business in China. Lim Chee Onn, Keppel Land's chairman, said in its 2001 annual report, that the company would place less emphasis on property investment as it requires heavy capital and produces low returns. Funds raised from divestments - such as via listed property trusts, asset securitisation and direct sales - would be deployed in better-yielding development assets and to property fund business. The trend of going asset-light has also been adopted by Capitaland Ltd, Singapore's second largest property group.