YTL secured the opening of two deluxe properties amid Malaysia’s halt on luxury home and commercial property development due to oversupply.
YTL, one of Malaysia’s largest real estate developers, announced on Tuesday that it has agreed to develop two new luxury hotels in Malaysia in cooperation with American hospitality giant firm Marriott International. The company also signed a memorandum of understanding with Marriott to build another two hotels in Japan, YTL said in a statement. YTL currently has 11 hotels under Marriott’s brands in its portfolio of 32 hospitality assets.
“Our 20-year relationship has been pivotal to the growth of YTL Hotels in Malaysia, Asia, and in the U.K.,” said YTL Managing Director Francis Yeoh.
In Malaysia, the second JW Marriott hotel will be located in the transportation hub at Kuala Lumpur Sentral, which serves as the main rail station for long-distance services, commuter rail services, public transport as well as the Airport Express. The second property in Kuala Lumpur will be the launch of the first EDITION-branded hotel W in the Kuala Lumpur City Center.
The design for both properties in Malaysia have yet to be finalized, YTL Executive Director Mark Yeoh told reporters. “We plan to apply for approvals in 12 to 18 months” for the hotels, he said.
YTL derives most of its earnings from its utilities business in Malaysia, Singapore, Indonesia, Australia and the U.K. that collectively accounted for about half of its pre-tax profit in 2017. Hotel operations make up a tad under 6% of its pre-tax profit. The proposed development in Malaysia comes at a time when government approvals for luxury property developments have been frozen nationwide amid concerns of oversupply and a shortage of affordable housing.
Developments of shopping malls, offices, commercial complexes and condominiums priced above one million ringgit (US$240,645.02) a unit have also been halted indefinitely. A freeze on hotel licenses in Kuala Lumpur was however lifted a year ago, in November 2016.
“I would say there’s competition but the outlook is still stable” for the hotel sector in Kuala Lumpur, said Affin Hwang Investment Bank’s analyst Ng Chi Hoong. “We will have to wait until the hotel opens and see the occupancy rate.”