KUALA LUMPUR: Property developer PJ Development Bhd (PJD) will build two new residences and a hotel for RM400 million to grow its hospitality business.

Swiss-Garden International Sdn Bhd (SGI) group general manager for sales and marketing Francis Lee said PJD will build the properties starting end of this year for completion in two to three years.

The residences will be located in Butterworth, Penang, and Kuantan, Pahang, and the hotel in Cameron Highlands, carrying the Swiss-Garden brandname.

"We are seeking to expand the hospitality business in line with the expected growth in the tourism sector. We are upbeat on the market and believe there will be strong demand for our products," Lee said.

SGI, the wholly-owned hospitality arm of PJD, currently owns and operates eight hotels, resorts and inns in Peninsular Malaysia and a lodge in Sydney, Australia. It also manages a resort in Sandakan, Sabah.

All the properties have an occupancy of more than 65 per cent per annum.

Lee was speaking to Business Times recently, in conjunction with the soft opening of the Swiss-Garden Residences Kuala Lumpur.

The residences in Kuala Lumpur, comprising two towers with 33 and 37 storeys each, were built for RM330 million.

They have 478 apartments ranging from 550 sq ft to 2700 sq ft, sold with leaseback options.

The property enables investors to buy the units with an annual guaranteed return of 7 per cent per annum for five years.

Lee said the residences in Butterworth and Kuantan will be built and sold with the same concept.

Swiss-Garden Residences group general manager for central region Rayan Komatt said he expects 63 per cent occupancy in the first year of operation, with an average rate of RM330 per room a night.

"We are targeting domestic and foreign travellers and corporate clients from Asia Pacific and Europe. We will operate three food outlets at the residences ourselves and therefore expect a gross operating profit of 45 per cent," he said.

SOURCE: Business Times