High-profile, Hong Kong-based Gaw Capital plans to escalate growth of its hospitality affiliate GCP Hospitality (GCPH), hoping to reach 12,000 rooms and US$8 billion of face value from a current level of 22 hotels, 5,000 rooms and US$3.7 billion in value, according to Christophe Vielle, CEO and Co-Founder of GCPH.
In fact, right at press time, GCPH had just acquired the 308-room Big Hotel in Singapore, for S$203 million (US$142.57 million), which it plans to covert to its G brand in about a year’s time.
Vielle, who has worked for Gaw Capital for 10 years and created the hotel platform about seven years ago, is closing in on a 450-room hotel in Japan, and by February he hopes to acquire a 15-hotel portfolio in Europe and reach 7,500 rooms. The current portfolio includes a mix of home-grown brands like G, the iconic Strand in Yangon, Myanmar, and branded properties from the likes of Accor, Hyatt and another icon, the InterContinental in Hong Kong, which it purchased from IHG earlier this year for an eye-popping US$938 million.
The group’s success to date, performance for past five years of over 18% IRR, and more like 22% to 23%, is the headline expected to drive growth in the near term. “We want to be the guys to invest with,” Vielle says. ”We develop, project manage, do marketing and operations (GCP currently manages about 75% of its portfolio and Vielle expects that to drop to about 60% as it becomes more of an acquirer and asset manager). We have a great young team, and we are eager and excited. We think out of the box by looking at properties and seeing what to do different to make it work… We are here to please our investors.”
What started with one hotel and a staff of three has grown to a group of 40 people working on the platform, and Vielle would love to keep going, saying first that he see great potential opportunity in Australia and loves the United States due to its pragmatism. He calls Europe, with the exception of London, “never great because it is not ready to act like the U.S., yet never bad either.” As for China, where Gaw has invested heavily, Vielle says, “Let’s wait a few years. There is a lot of business to be done there, but it is difficult to understand investments and returns. Values are based on the property versus performance, and that will change.”
The two previously mentioned GCPH icons, the InterContinental and The Strand, are another focus. Vielle says GCPH is working with IHG on a renovation to return the InterContinental to its formal glory. The group is also getting started on a US$20 million refurbishment of The Strand, including adding an annex that will grow room count to 72 from 31. At the same time, the group is launching The Strand cruise along the river between Bagan and Mandalay to help update the image of what Vielle calls “The Old Lady.” Vielle also expects GCPH to grow its portfolio with a few more hotels across Myanmar.