Raffles Education skis into Switzerland

FROM the animated city of Sydney to the atmospheric Clarke Quay in Singapore and the dusty charm of Phnom Penh, the business voyage of Raffles Education Corp - one of Asia's largest private school operators - has now taken it to Europe, on the slopes of Nendaz in Switzerland.

In its maiden foray into Europe, the mainboard-listed company said on Thursday that it will buy a spanking new four-star hotel with seven commercial units below and land with readily available teaching facilities and dormitories for 29.12 million Swiss francs (S$39.8 million).

Raffles Education plans to set up schools for hospitality management and design and a Swiss International Baccalaureate school there.

The rationale is clear - for its schools scattered in 30 cities across 12 Asia-Pacific countries and now Switzerland, to woo more students with the sweetener being a possible internship at Hotel Nendaz 4 Vallees and Spa - an Alpine resort-style hotel at the heart of a ski resort which opened its doors only in December last year.

"Our strategy is to have students across Raffles Education Corp's colleges come for short stays to undertake cultural and language immersion courses complemented by courses such as skiing, tracking and deportment before we implement full hospitality management programmes," said Raffles Education's chairman and CEO Chew Hua Seng.

The firm said the hotel acquisition will allow students from Switzerland and other countries where the firm operates to gain hospitality experience through internships and is likely to increase student intakes across its colleges while the purchase of the commercial units - they are located at the ground floor of the hotel complex - allows for the control of tenant mix to complement the hotel's operations.

The land with two existing buildings with teaching rooms, dormitories and a canteen at the Colonie will be turned into a hospitality management school.

The acquisitions, to be funded through bank borrowings and internal resources, will positively impact the firm's current financial year. Based on Raffles Education's pro forma net profit for fiscal year ended June 2014, the deal will bump up its earnings per share from 5.40 Singapore cents to 5.46 Singapore cents.

The private education provider said the expansion into Europe is in line with its "progressive morphing" into three related businesses to drive growth - a premier private education provider, management of education assets and facilities and education-related real estate investment and development.

"We believe that with our three growth engines operating in tandem, we are better positioned to harness value-accretive three-pronged opportunities around the world," said Mr Chew.

Hotel Nendaz sits on 5,910 square metres of land with a total built-up area of 9,895 square metres consisting of 62 hotel rooms, restaurants, bars, conference room and facilities, 47 car park lots and a 2,200 square metre well-equipped spa.

The hotel was completed at the end of last year and has since been leased out to a hotel operator for 10 years. Raffles Education's subsidiary, 4 Vallees, the firm acquiring the assets, will take over the existing lease and earn a fixed annual rental.

The market reacted positively to the early morning announcement with the counter closing the day at 34 Singapore cents, up one cent or 3 per cent.