Gaw Capital to spruce up, reposition Big Hotel

Singapore

HONG Kong-based Gaw Capital Partners, which earlier this week completed its maiden Singapore acquisition - Big Hotel along Middle Road - will refurbish the property and rebrand it.

The private equity group is also keen to invest in Singapore's high-end residential sector, which has seen price softness, and is open to making bulk purchases "at the right price", said Imelda Tham, senior investment director at Gaw Capital, in an interview with The Business Times on Friday.

"We're keeping an eye on the residential market. It is not going to be easy because of the 15 per cent ABSD (additional buyer's stamp duty), but we're looking and hopefully we'll find something."

Singapore's industrial property market is another sector Gaw Capital is monitoring.

On the whole, the group's outlook for the Republic remains positive despite the soft property market. "We take a long-term view on the market and the current weakness presents good pockets of opportunity - particularly in the residential and industrial sectors.

"The key is to find the right product in the right location, just like what we did with the Big Hotel, where the location is excellent and the product positioning is well-suited for the area," Ms Tham said.

GCP Hospitality, an affiliate of Gaw Capital Partners, will rebrand, refurbish and reposition the 16-storey freehold Big Hotel, which the group acquired for S$203 million, into a lifestyle hotel under its Hotel G brand.

The hotel will be operated by GCP Hospitality. "We are looking to create a hotel that offers creative design, strong food and beverage concepts, and cutting-edge events by capitalising on the Hotel G network and brand recognition in Bangkok, Hong Kong and San Francisco," she added.

Refurbishment works at the Singapore hotel, which are expected to cost about S$10 million, are slated to begin early next year. "We'll do some light touches to the common areas upstairs; downstairs we'll need to do more as we want to introduce a stronger F&B concept."

The hotel's rooms may also be spruced up a little, but there will not be any change to the existing inventory of 308 rooms.

Big hotel will remain open during refurbishment and the target is to complete the asset enhancement works in time for a relaunch under the new brand by mid-November 2016 - when a one-year lease that Gaw Capital has signed with the existing operator, Gryphon Hospitality Services, ends.

Following the hotel's makeover and rebranding, GCP Hospitality is eyeing at least 15 per cent initial increase in room rates over the current S$130-140 a night at which Big Hotel's rooms are trading. "And as our brand gets more recognition in the Singapore market, we hope to improve further on that," said Ms Tham.

The S$203 million that Gaw Capital paid for Big Hotel translates to S$659,090 per room. Most of the rooms are 13-15 sq metres (140-161 sq ft) in area.

Gaw Capital bought the property from Singapore-based ERC Unicampus.

Set up by brothers Goodwin and Kenneth Gaw in 2005, Gaw Capital has raised equity of US$5.22 billion since its inception, and has US$10.61 billion in assets under management as of the second quarter of 2015.