PENANG: YNH Property Bhd has engaged Fraser Hospitality Pte Ltd, a wholly-owned subsidiary of Fraser & Neave Ltd, to manage its RM300mil Lot 163 Suites project at Jalan Perak, Kuala Lumpur.
Fraser Hospitality is an international branded serviced residence management company providing consultancy and other services in relation to Gold Standard residences in key gateway cities of the world.
YNH corporate services head Daniel Chan said a memorandum of understanding was signed with Fraser Hospitality last month.
The five-year contract would start at end-2008 upon completion of the 217-unit project, which is 95% sold to date, he said, adding that most of the buyers were keen to let Fraser Hospitality manage and lease their properties
“Under our profit sharing agreement with Fraser Hospitality, it will get 3% of the annual gross operating revenue from rentals, which is about RM20mil a year.
“Fraser Hospitality will also get an incentive fee, which is 4% of the yearly gross operating revenue for the first year. The incentive fee will increase to 5% of the yearly gross operating revenue in the second year and 7% in the third,” he told StarBiz.
Chan added that there was an option to renew the contract for another five years.
Chan said the capital value of Lot 163 Suites, previously named 163 Residence, had appreciated between 30% and 40% since their launch in 2005.
“When they were first launched, the selling price was about RM800 per sq ft. It is now between RM1,000 and RM1,200 per sq ft,” he said.
On the group’s RM1.2bil Menara YNH project, Chan said the local authorities had last month approved the construction of the iconic 35-storey office tower, Menara YNH , in Jalan Sultan Ismail.
“Negotiations are progressing well and we will soon enter a second round of meetings with the prospective joint-venture partners.
“They are very keen to undertake the development of Menara YNH as soon as possible in view of the lack of premium commercial spaces in Kuala Lumpur. We intend to start construction work for the tower by end-2007,” he said.