Landmarks chief operating officer (COO) Fong Chee Khuen told The Edge Financial Daily that the initial facilities within Phase 1 of the development called Chill Cove include a RM65 million clearwater lagoon and a hotel featuring 40 chalet-like tents. These two facilities will be open for operations in the last quarter of this year.
By 2016, Landmarks will have fully developed the 90ha piece of land that has been allocated for Phase 1 which will include a wellness resort operated by well-known US spa operator Canyon Ranch, entertainment areas, bars, restaurants, aquatic sports facilities, retail areas, and at least eight hotels.
It has taken years for the Treasure Bay Bintan development to take shape.
Asked why, Fong said: “We do not want to be (just) another developer who builds the hardware. We actually spent a lot of time to study the market.”
Paul JH Leong, COO of the Treasure Bay Bintan, concurred.
“It has taken us a bit of time to analyse and then to react to make sure that Bintan has the right offering in terms of new products, features, games, food and beverage, and retail,” he said.
For one, instead of rolling out another typical property development and anchoring itself on property sales, Landmarks had opted to differentiate itself by offering health and wellness themed resorts to travellers by establishing joint ventures with international brands to drive visitor arrivals.
However, Leong said the group will now be more forthcoming about its Treasure Bay Bintan venture now that the development plans are “a bit more firm” and investors can expect future announcements on “who the hotel operators” and “joint venture (JV) partners” are.
To drive this development, Leong said there is no need for Landmarks, which is in net cash position, to raise additional funds as the group’s balance sheet has been managed carefully. As at Dec 31, 2013, the group’s cash stood at RM115.4 million, while its borrowings stood at RM88.5 million.
Fong said Landmarks has to date secured hotel management contracts with international hotel brands such as Ibis Budget and Mercure and is now in advanced discussion with several five-star international hotel brands for management contracts.
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| Fong says completion of Phase 1 will add an additional 1,500 rooms to Bintan island |
Fong said the completion of Phase 1 of Treasure Bay Bintan will add an additional 1,500 rooms to Bintan island’s existing 1,375 which will help solve the current shortage in hotel room supply. This bodes well for Landmarks as Bintan island now commands room rates from as low as S$160 (RM410) to S$1,000 a night and enjoys a healthy average occupancy rate of 65%.
“We need to compete with the likes of Bali, Phuket and to a certain extent Langkawi. For us to compete, Bintan has to offer enough rooms and enough scale for it to hold a major convention … We reckon that 5,000 rooms are at least a (good) starting number for the island to have to become a premier tourist destination,” Fong added.
Meanwhile, in a filing with Bursa Malaysia yesterday, Landmarks announced that its unit PT Treasure Development Services (PT TDS) has teamed up with Indonesia’s PT Ekasurya Mandiri (PT EM) to set up a concrete batching plant on Bintan island to supply concrete for the development of Treasure Bay Bintan, or to such other places in Indonesia as may be efficacious.
Under the deal, a joint venture entity named PT Pesona Lagoi Mandiri (PT PLM) will be formed to undertake the business of producing and supplying ready mix and dry mix concrete and mortar for use in construction works. PT TDS will have a 51% stake in the JV firm, while PT EM will hold the remaining 49%.
“The intended paid-up capital of PT PLM is 10 billion rupiah (RM2.68 million),” said Landmarks.
“The construction of the resort destination will require large amounts of concrete and the JV will ensure that the group will have adequate, timely and cost effective access to the construction material, tapping on the experience and expertise of a proven supplier,” it added.
Shares in Landmarks closed two sen or 1.82% at RM1.12 yesterday, giving it a market capitalisation of RM538.5 million.
This article first appeared in The Edge Financial Daily, on July 4, 2014.
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