From left to right: CP Group executive chairman Datuk Tan Chew Piau; his son Marvin Chen; and executive director Datin Jane Yeo.
Instead the philosophy of its executive chairman Datuk Tan Chew Piau is “not to overfill our plate” but to undertake projects at its own pace.
Besides keeping busy at its Queensbay development in Penang, it will also expand its presence in the hospitality sector and further build up its Eastin brandname.
Tan says maintaining its private entity status has granted CP the freedom to do away with red tape associated with listed companies when it comes to venturing into new investment opportunities.
“When opportunity arises, we can move with greater ease,” Tan says in an interview with StarBizWeek.
Tan should know as he was the managing director of second board company, Chew Piau Bhd, from 1991 to 1993. He sold his stake in 1993 to set up CP Group.
“We are not keen to tie up our funds in huge landbank and will prefer to acquire land according to needs and build at our own pace,” Tan adds.
He says keeping lean has cushioned CP from the difficult times including three major recessions and the latest global financial crisis.
“I am happy with the growth of the group which has exceeded my expectation,” Tan enthuses.
CP has come a long way as a small class contractor in the 1970s. Today, it has ventured into property development, hospitality and retail asset investment, and is on the look out for other viable opportunities both within and outside the country.
Overall, the group expects a 10% to 15% annual income growth.
“We are targeting a 8% to 10% annual growth for our retail and hospitality income, and also a healthy growth for our property development division. We see an improvement in market sentiment and plan to launch new projects next year,” Tan says.
Tan sees the two property divisions as complementary to each other.
While the retail and hospitality assets provide regular income streams to the group, property development provides better return on investment and higher income growth as the turnaround time is faster, although it is subject to higher risk and more volatile market conditions.
In property investment, it owns and operates the 388-room Eastin Petaling Jaya and the soon-to-be-opened, 328-room Eastin Penang, which are both four-star business class hotels.
Its maiden retail asset is the Queensbay Mall, the largest shopping mall in the northern region with gross built up of 2.5 million sq ft and net lettable space of 1 million sq ft. It has 500 retail outlets and an occupancy of 95%.
In 2003, CP signed a definitive agreement to take over the Bayan Bay project, which was abandoned in 1998 during the Asian financial crisis. Revival work started in 2005 and the development was renamed Queensbay. The 70 acre development was originally undertaken by Eternal Resources Sdn Bhd, a 70:30 joint venture between the now defunct Anson Perdana Bhd and the Penang Development Corp. CP was picked as the white knight over seven other bidders to revive the abandoned project.
Development of Queensbay is divided into 13 parcels comprising luxurious residences, a retail mall, shop offices, signature office suites, corporate towers, serviced residences, business class hotels, a convention centre, a medical centre, marina and waterfront retail shops.
With a ratio of 35:65 between residential and commercial components, it will have an estimated gross development value of RM2bil and is targeted for completion in seven years.
So far, five parcels - Queensbay Mall, Eastin Penang, BayAvenue, BayGarden and BayStar - have been completed. The completed properties include commercial shop houses, semi detached houses, bungalows and condominiums.
The remaining eight parcels on about 30 acres will have waterfront residences and mixed commercial development.
In hospitality, Tan has big plans for Eastin and plans to build it up into a strong hotel management brand within and outside the country. The countries targeted include Vietnam, China and Indonesia.
According to Tan, the hospitality industry is a long term business and if it is managed properly, it can be lucrative and very fulfilling.
With the group’s second hotel project set to open for business in Queensbay on Nov 12, he is already eyeing a third Eastin hotel, also in Queensbay.
With an estimated investment of RM130mil, the 14 storey-Eastin Penang has 328 rooms. It is positioned as the preferred hotel for business executives.
Tan still remembers the time when he first ventured into his maiden hotel project - Eastin Petaling Jaya.
It was just before the Asian financial crisis when he invested RM100mil to build Eastin Petaling Jaya. The hotel is easily worth RM250mil today.
It was one of the two hotels (the other being Mandarin Oriental) that were completed in 1998 when the Asian financial crisis hit.
“Our perseverance paid off finally and Eastin Petaling Jaya has since become an iconic brand for business class hotels in the country. The hotel has clocked up average occupancy rates of 68% to 70% in the last 11 years,” Tan says.
He says many interested parties have made their offers to buy over the hotel but he is not keen to sell.
His wife, Datin Jane Yeo, an executive director of CP, attributes Eastin’s success to Tan’s hands-on management style and passion for the hospitality business.
“We don’t believe in outsourcing the management of our hotel and retail assets to other property managers or hotel chains and prefer to groom our own team of experts to manage the properties,” she says.
Tan says the Eastin team is now capable of extending its expertise for managing business class hotels both nationally and beyond Malaysia. He sees the Eastin brand spreading its foot-print regionally in the near future.
To consolidate and strengthen its leading brand position, Tan says Eastin PJ will be undergoing major refurbishment next year.
Moving forward, Tan says Eastin is now exploring a demand-based pricing structure to give the best deals to its guests. It has plans to issue Eastin privilege cards for frequent and loyal business clients.
“Eastin PJ has been profitable since its first operating year, despite being hit by the Asian financial crisis. So generally, I am confident our new Penang hotel would do well based on our experience in managing and operating a hotel over the past decade. It can look forward to an occupancy of over 80% upon its opening as it coincides with the seasonal peak period.
“The Penang government’s focus on tourism and knowledge based industries will draw more well heeled tourists to the island. And, with the construction of the second bridge underway, and the hotel’s proximity to the free industrial zone and the Penang International Airport, it will become the premier business class hotel for the northern region,” Tan adds.
By The Star (by Angie Ng)
Instead the philosophy of its executive chairman Datuk Tan Chew Piau is “not to overfill our plate” but to undertake projects at its own pace.
Besides keeping busy at its Queensbay development in Penang, it will also expand its presence in the hospitality sector and further build up its Eastin brandname.
Tan says maintaining its private entity status has granted CP the freedom to do away with red tape associated with listed companies when it comes to venturing into new investment opportunities.
“When opportunity arises, we can move with greater ease,” Tan says in an interview with StarBizWeek.
Tan should know as he was the managing director of second board company, Chew Piau Bhd, from 1991 to 1993. He sold his stake in 1993 to set up CP Group.
“We are not keen to tie up our funds in huge landbank and will prefer to acquire land according to needs and build at our own pace,” Tan adds.
He says keeping lean has cushioned CP from the difficult times including three major recessions and the latest global financial crisis.
“I am happy with the growth of the group which has exceeded my expectation,” Tan enthuses.
CP has come a long way as a small class contractor in the 1970s. Today, it has ventured into property development, hospitality and retail asset investment, and is on the look out for other viable opportunities both within and outside the country.
Overall, the group expects a 10% to 15% annual income growth.
“We are targeting a 8% to 10% annual growth for our retail and hospitality income, and also a healthy growth for our property development division. We see an improvement in market sentiment and plan to launch new projects next year,” Tan says.
Tan sees the two property divisions as complementary to each other.
While the retail and hospitality assets provide regular income streams to the group, property development provides better return on investment and higher income growth as the turnaround time is faster, although it is subject to higher risk and more volatile market conditions.
In property investment, it owns and operates the 388-room Eastin Petaling Jaya and the soon-to-be-opened, 328-room Eastin Penang, which are both four-star business class hotels.
Its maiden retail asset is the Queensbay Mall, the largest shopping mall in the northern region with gross built up of 2.5 million sq ft and net lettable space of 1 million sq ft. It has 500 retail outlets and an occupancy of 95%.
In 2003, CP signed a definitive agreement to take over the Bayan Bay project, which was abandoned in 1998 during the Asian financial crisis. Revival work started in 2005 and the development was renamed Queensbay. The 70 acre development was originally undertaken by Eternal Resources Sdn Bhd, a 70:30 joint venture between the now defunct Anson Perdana Bhd and the Penang Development Corp. CP was picked as the white knight over seven other bidders to revive the abandoned project.
Development of Queensbay is divided into 13 parcels comprising luxurious residences, a retail mall, shop offices, signature office suites, corporate towers, serviced residences, business class hotels, a convention centre, a medical centre, marina and waterfront retail shops.
With a ratio of 35:65 between residential and commercial components, it will have an estimated gross development value of RM2bil and is targeted for completion in seven years.
So far, five parcels - Queensbay Mall, Eastin Penang, BayAvenue, BayGarden and BayStar - have been completed. The completed properties include commercial shop houses, semi detached houses, bungalows and condominiums.
The remaining eight parcels on about 30 acres will have waterfront residences and mixed commercial development.
In hospitality, Tan has big plans for Eastin and plans to build it up into a strong hotel management brand within and outside the country. The countries targeted include Vietnam, China and Indonesia.
According to Tan, the hospitality industry is a long term business and if it is managed properly, it can be lucrative and very fulfilling.
With the group’s second hotel project set to open for business in Queensbay on Nov 12, he is already eyeing a third Eastin hotel, also in Queensbay.
With an estimated investment of RM130mil, the 14 storey-Eastin Penang has 328 rooms. It is positioned as the preferred hotel for business executives.
Tan still remembers the time when he first ventured into his maiden hotel project - Eastin Petaling Jaya.
It was just before the Asian financial crisis when he invested RM100mil to build Eastin Petaling Jaya. The hotel is easily worth RM250mil today.
It was one of the two hotels (the other being Mandarin Oriental) that were completed in 1998 when the Asian financial crisis hit.
“Our perseverance paid off finally and Eastin Petaling Jaya has since become an iconic brand for business class hotels in the country. The hotel has clocked up average occupancy rates of 68% to 70% in the last 11 years,” Tan says.
He says many interested parties have made their offers to buy over the hotel but he is not keen to sell.
His wife, Datin Jane Yeo, an executive director of CP, attributes Eastin’s success to Tan’s hands-on management style and passion for the hospitality business.
“We don’t believe in outsourcing the management of our hotel and retail assets to other property managers or hotel chains and prefer to groom our own team of experts to manage the properties,” she says.
Tan says the Eastin team is now capable of extending its expertise for managing business class hotels both nationally and beyond Malaysia. He sees the Eastin brand spreading its foot-print regionally in the near future.
To consolidate and strengthen its leading brand position, Tan says Eastin PJ will be undergoing major refurbishment next year.
Moving forward, Tan says Eastin is now exploring a demand-based pricing structure to give the best deals to its guests. It has plans to issue Eastin privilege cards for frequent and loyal business clients.
“Eastin PJ has been profitable since its first operating year, despite being hit by the Asian financial crisis. So generally, I am confident our new Penang hotel would do well based on our experience in managing and operating a hotel over the past decade. It can look forward to an occupancy of over 80% upon its opening as it coincides with the seasonal peak period.
“The Penang government’s focus on tourism and knowledge based industries will draw more well heeled tourists to the island. And, with the construction of the second bridge underway, and the hotel’s proximity to the free industrial zone and the Penang International Airport, it will become the premier business class hotel for the northern region,” Tan adds.
By The Star (by Angie Ng)
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