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Development Design & Construction

issue 4 | October 2011

PROFILE SPACE ARCHITECTS

Apara hotel advisers

This week we featuring talented designer Mark Pulsirivong and Space Architects and chat with Claas Elze of Apara Hotel Advis-ers to fi nd out more about hotel asset management.

These are exci ng mes as we look to launching D|D&C TV in the next week. D|D&C TV will feature interviews with the devel-opers, designers and sneak peaks at projects around the region.

Confi rm your free subscrip on now on Development |design & construc on!

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Development Design & Construction

M-Mode Sathorn courtesy of Space Architecture

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Summary Newsfrom around Asia

Hotel Asset Management with Claas Elze Apara Hotel Advisers

Designer Profi leMark Pulsirivong and Space Architects

Web Watch

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Together with new city plan-ning regula ons, the recent

fl ooding that con nues to aff ect Thailand is likely to have vari-ous implica ons for the Bang-kok property market once the waters recede. While the new regula ons are designed to im-prove the poorly planned urban sprawl that has seen the city grow from 2 million in 1960 to 10 million today, the fl oods have served as a reminder of the dan-gers 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 fi nalised. One of the main features of the new regula ons will be to concen-trate 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 devel-opers. Concerned that new re-stric ons will limit the size and subsequent revenue poten al of buildings in aff ected areas, some developers have rushed through projects to ensure they get underway before the new regula ons come into eff ect.

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

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 fl ooding is likely to be an in-creased demand for condomini-ums. While many of Bangkok’s suburban residen al areas have been inundated by the fl oodwa-ters, 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 high-rise condos expected, there has been an increase in the number of requests submi ed by devel-opers for high-rise permits in the city.

Floods And New Regulations To Change Bangkok Property Market

www.linuxxoffi ce.comUnderstated Luxurywww.riverbirches.co.nz

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The Macau government has submi ed for public con-

sulta on two proposals on how best to use 361.65 hectares of reclaimed land for urban devel-opment. Reclaimed at a cost of MOP 7 billion and due for com-ple on in 5 years, the land will be used to create 5 new urban areas – two in the Macau pe-ninsula and three in Taipa. How-ever, the exact use of the land is yet to be determined.

In the fi rst proposal, 100,000 people will be housed in 33,000 public and private housing units. The second scheme propos-es 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 facili- es, community and social serv-

ices buildings, sport facili es, administra on buildings, and various other public infrastruc-ture projects. However, one type of development that will defi nitely not be considered is gaming.

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

Korea’s Hanwha Group is to increase its presence in

China following the signing of a Memorandum of Understand-ing between its Chinese busi-ness arm, Hanwha China, and China’s Yida Group to develop a hot-spring resort in the Long-men leisure complex in Dalian, Liaoning Province.

Macau To Decide On Reclaimed Land Use

Under the agreement, Hanwha China will be responsible for de-veloping the spa resort’s overall concept, planning the construc- on 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 develop-ment of recrea onal facili es, a water park and a golf course.

Phuket Property Sold Out In 3 Hours

All 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 locat-ed 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 commu-nal swimming pool, gym and garden, but are small and ba-sic 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 mil-lion 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 profi t. Bouyed by the suc-cess, Sansiri is set to launch two new projects in Phuket: Habi a, a collec on of semi-detached houses; and Habitown, a com-plex of two storey townhouses.

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Aston Interna onal is to take its por olio of budget-

brand favehotels to fi ve with the opening of two new proper es on the resort islands of Bali and Langkawi this month. The 251-room favehotel Seminyak in Bali will include a swimming pool, coff ee 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 coff ee shop, bar and lounge, outdoor swimming pool, spa, and three mee ng rooms.Aimed at the young and fashion-conscious, 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.

Two More Favehotels For Malaysia And Indonesia

As Singapore’s Building and Construc on Authority’s

(BCA) looks to adopt the Build-ing 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 eff ec- ve implementa on in the city

state.BIM is a 3-dimensional model-ling technology that aims to pro-mote more sustainable designs and higher construc on produc- vity by enabling professionals

to work on a building project in

a digital format before the ac-tual construc on phase begins.To ensure BIM is introduced successfully, one of the key fac-tors proposed by the panel of experts is the ac ve par cipa- on of the private sector. In par- cular, the need for collabora- on between the public sectors

of diff erent countries in shar-ing best procurement policies, standards, and processes was stressed.The experts also proposed the establishment of a na onal dig-ital library as well as the use of

Suntec Set For Major Makeover

ARA Trust Management—the managers of Suntec Real

Estate Investment Trust—is to invest S$410 million (US$326 million) on renova ng and up-grading 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 tech-nology will also be incorporated to support the media require-ments of future events.

Singapore’s BIM Needs Private Sector Support

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 profes-sionals to get involved.

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Just a few years ago, the proper-ty market was booming in Viet-nam. Between 2005 and 2009, funds were fl owing 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 fi nance their projects and the property mar-ket has slowed to a crawl as ris-ing consumer prices, a weaken-ing currency, and a ght credit policy have all taken their toll. Yes, the property market in Viet-nam 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 high-est rate of infl a on has slowed for the last 2 months. And even though the central bank raised its refi nancing 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? Consid-ering how slowly things move in the Vietnam property develop-ment industry, now may be the best me to invest. Planning, purchasing land, obtaining con-struc on permits, and ge ng the necessary licensing can eas-ily 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 com-pleted 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 of-fi ce units where there is a cur-rent 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.

The Vietnamese government is set to unveil the details of

its 15-year construc on master plan for Ho Chi Minh City. Ap-proved by the prime minister last year, the details of the plan are set to be presented to the public at an upcoming exhibi- on.

Highlights of the plan include transporta on, water manage-ment, 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 fi nancial 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.

Ho Chi Minh City’s 15-Year Plan

Vietnam Property Market To Bounce Back In 2 Years

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Gloria Hotels & Resorts of Hong Kong plans to open

at least fi ve new proper es in China over the next 6 months including a 90-room property in Shanghai under its Merlin bou- que 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 prop-er 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 to-wards family groups and Euro-pean travellers.

Gloria is also expanding its affi li-ate programme. In November, it will add the 38-room Red Wall Garden bou que hotel in Bei-jing to exis ng proper es in To-kyo and Beijing.

Gehry Looks East

With 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 master-pieces as the Walt Disney Con-cert Hall in Los Angeles among his achievements, the 82-year-old recently unveiled the design for his fi rst Australian building and is currently compe ng for projects in China and India.

Although Gehry refused to give the details of the projects cur-rently 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 af-ter almost 6 years of work as the emirate looks to scale back on some of the ambi ous plans it made before the fi nancial crisis of 2008.

Gloria Increases Presence In China

China’s HNA And Spain’s NH Hotel-es Form Strategic Partnership

China’s HNA Hotel Group has formed a strategic partner-

ship with NH Hoteles of Spain to create a brand new hotel management company and in-troduce a new interna onal business hotel brand into the Chinese market. The partner-ship was established a er HNA invested 430 million euros (US$609 million) to acquire a 20% stake in NH Hoteles.

The fi rst collabora on be-tween 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 ho-tels in 25 countries, the new property will be the Spanish company’s fi rst in Asia. Addi- onal NH-branded proper es

are already planned for Beijing and Nanjing with more to fol-low.

HNA is also looking to con nue the expansion of its own Tangla Hotels & Resorts brand. Having opened its fi rst Tangla property in Beijing in 2009, the company has established three dis nc ve sub brands catering to the lux-ury, bou que, and business ho-tel markets. There are plans to open new proper es in Sanya, Haikou, Shenzhen, and Beijing before the end of 2011.

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CapitaValue Homes, a mem-ber of the Singapore-based

CapitaLand group, has secured two new sites in China for resi-den 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 ap-proximately 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 con-struc on in Wuhan. In addi on, CapitaValue Homes has another three projects in the pipeline in Ho Chi Minh City, Vietnam.

Captavalue Homes Secures Two New Sites In China

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Apara hotel advisers

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

What does Apara do?

Apara Hotel Advisers is a hotel asset management and ad-visory fi rm that provides services to existing and potential hotel investors, owners and developers throughout the Asia/Pacifi c 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 com-mercial 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 benefi t your clients?

We represent the owner’s interests in the relationship with the third-party operator. In doing so, we are present through-out 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 benefi t of:

• 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 infl uence the

management of those hotels to improve bottom line performance (cash fl ows) 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/Pacifi c region

Claas Elze | Apara Hotel Advisers

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• our proven ability to close on transactions• a strong understanding of hotel operating com-

panies • a solid understanding of the current and chang-

ing hotel development landscape across Asia with an ability to respond quickly

What are the biggest challenges to the pro-vision 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, es-tablished and accepted for many years. A signifi -cant part of our endeavors includes educating the market about the benefi ts of professional hotel asset management.

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

• 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 ad-viser’s team as the most productive working rela-tionship involves frequent interaction.

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

We believe that selecting the right brand and nego-tiating a competitive management contract are criti-cal 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 particu-lar 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 de-veloper.

First of all, it is critical to understand the costs in-volved 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, qualifi ca-tions and capabilities of the various hotel operators

(different operators may add varying degrees of value to a hotel based on their size, facilities, lo-cations, 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–ho-tel 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 own-ers 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 Singa-pore and Hong Kong. As of October 2011 we are asset managing 27 properties (most fl agged under the major international brands) and have been in-volved 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 in-

itial investment than a market opportunity would warrant, which in the best-case scenario yields lower than expected returns and in the worst-case scenario destabilizes the fi nancial footing of the owner.

• Engage an operator that does not add the re-quired value to the investment.

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

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

www aparahoteladvisers.com

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Unlike his father, renowned Thai civil engineer Sindhu Pulsirivong , Mark Pulsirivong has

turned his attention to architecture and the arts. Having established Space Architects, a Bang-kok- 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 refl ect 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, important-ly, 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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SPACE ARCHITECTS

PROFILE | SPACE ARCHITECTS

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The InterContinental Hotel, Hua Hin, Thailand

Realised in partnership with an international design consultancy and another local ar-

chitect, 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

Sala Samui Resort, Samui Island, Thailand

The 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.

Phuket Marina, Phuket, Thailand

Feasibility Study and Concept Design 2007

This 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.

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 fi sh, and and waterscapes created a fl ow to the beachfront.

PROFILE | SPACE ARCHITECTS

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