CLI, Frasers Hospitality don't see big hit to Shenzhen businesses from temporary lockdown

CapitaLand Investment (CLI) and Frasers Hospitality don't expect major impact to their businesses in Shenzhen after a spike in Covid-19 cases prompted the Chinese government to implement a lockdown of China's tech hub.

CLI operates integrated development Raffles City Shenzhen - which features retail, office and hospitality components - as well as another office property and 2 lodging properties in the Chinese city. All in, there are 3 serviced apartments currently operating under the Ascott and Somerset brands. Four more serviced apartments are in the pipeline to open this year.

A spokesperson from CLI told The Business Times: "As CLI's presence in China is diversified across cities and asset classes, the impact of Shenzhen's temporary lockdown to our overall business is expected to be minimal. We are closely monitoring the situation, and looking after the health and safety of our tenants, guests and staff remains our top priority."

With the lockdown in place, food & beverage outlets at Raffles City Shenzhen are doing takeaways and delivery at present, while the lodging properties are still operating.

The spokesperson added: "Our offices are currently operating under the local authorities' advisory for Shenzhen's workforce to work from home, except for those in the essential sectors."

According to a Reuters report, an official from the city's municipal government said on Thursday (Mar 17) that it will allow companies to resume work "in an orderly manner", though no timeline was given for the resumption. This comes after non-essential economic activity was suspended for a week until March 20. Meanwhile, its 17.5 million residents are undergoing three rounds of testing from March 14 to 17.

At Fraser Suites Shenzhen, which houses 211 luxury serviced residences, occupancy currently stands at more than 80 per cent, said Frasers Hospitality chief operating officer Mark Chan.

Given the property's location in the bustling business district of Futian and its proximity to multinational corporations and international enterprises, "we have many senior executives who make up the strong base of long-stay guests", Chan noted. "These guests have continued to stay with us throughout the pandemic, given the level of safety and security that our property provides."

In Shenzhen's current citywide lockdown, the company - a member of Frasers Property - has worked with the local authorities to set up a testing site on the property to make it convenient for guests and staff to get tested daily.

Some staff have also been asked to stay at Fraser Suites Shenzhen, to keep them safe. "This helps minimise their travel time and exposure to others, while also ensuring that operations at the property remain undisrupted," Chan said.

Shares in CLI closed at S$3.72 on Thursday, down one cent or 0.27 per cent, while shares in Frasers Property was one cent or 0.94 per cent higher, at S$1.07.

READ MORE:

• China locks down technology hub Shenzhen as Covid-19 cases jump
• Metro Group invests in slew of sectors to ensure resilience