Singha Estate finalising hotel acquisition deal in UK

Chief executive officer Naris Cheyklin said the company expected to close hotel-acquisition deals in Britain this quarter.

Singha Estate and its Thai partner, Fico Group, are working on a final study for further expansion. If they are able to finalise these deals, they will secure more than 200 rooms in Britain. He said hotels in Britain right now could be acquired for as much as 10 per cent below market rate because of the weakening of the pound sterling after UK citizens voted in June to leave the European Union. A hotel-industry source who did not want to be named said Singha Estate might spend up to Bt700 million to acquire three hotels, one in Scotland and two in UK England, with 70 rooms in each property.

Last year, S Hotels and Resorts (UK), a wholly owned subsidiary of Singha Estate and Fico Holding (UK), a part of Fico Group, signed a 50:50 joint-venture agreement to form FS JV Co in the United Kingdom to acquire Jupiter Hotels for about 155 million pounds (Bt8.5 billion) from Patron Capital and its partner, the Royal Bank of Scotland.

Jupiter manages 26 UK hotels operating under the Mercure brand, with a total of 2,883 rooms. Most of the properties are owned freehold. It also manages a further six hotels for other owners in Britain. Naris said Singha estate was also looking for hotels in other countries such as Maldives, Vietnam, Malaysia, Cambodia and Myanmar (Bagan, Inle Lake and Mandalay). In the domestic market, it hopes to open more hotels in key tourist destinations such as Phuket, Pattaya1, Hua Hin, Koh Samui2, Krabi and Khao Lak. There are two Thai hotels in Singha Estate’s portfolio: Santiburi Beach Resort and Spa on Koh Samui3 and Phi Phi Island Village Resort in Krabi province.

Expansion into Maldives would serve high-end holidaymakers, while hotels in Southeast Asia would serve the growth of mass markets. For Maldives, Singha is considering various options, including joint ventures. Major Thai hotel chains Dusit International, Centara and Minor International have already entered the famous resort islands.

“For overall future expansion, we will focus on acquisition of existing hotels over the next three years and after 2019 we will invest by ourselves,” Naris said. He added that by 2020, Singha Estate should increase the number of hotels in its portfolio from 28 (26 in Britain and two in Thailand) to 40, with total room numbers increasing from about 3,000 to 5,000. In that year, revenue from the hotel unit should increase from Bt2 billion this year to Bt8 billion. Of that amount, Bt5 billion will come from the domestic market and Bt3 billion from overseas. However, revenue from the hotel unit will remain at 40 per cent of Singha Estate’s total income, which is targeted at about Bt20 billion in four years. To prepare for long-term growth, Singha Estate recently established a sister company called SHR Co, apparently an abbreviation of “Singha Hotels and Resorts”. SHR is a holding company and that plans to list on the Stock Exchange of Thailand in a few years. Under SHR’s direction, the company will initiate several hotel brands ranging from luxury to mid-scale. The luxury brand is Santiburi Beach Resort and Spa in Koh Samui4, and all others, both existing and new properties, will be positioned as four-star hotels.

Over the last few years, Singha Estate spent more than Bt9.1 billion on its hotel business.

Of that investment, Bt8.5 billion was for hotel acquisitions in Britain, Bt300 million to Bt400 million for renovation and expansion of Santiburi in Koh Samui5, and Bt200 million for acquisition and renovation of Phi Phi Island Village Resort in Krabi province.


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  2. ^ Samui (
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