Singapore group NWD to launch the flagship Radisson Blu Hotel and Apartments Penang

While Singapore’s interest in Johor, Malaysia has escalated following the progress of the Johor Bahru-Singapore Rapid Transit System (RTS), announcements of the Johor-Singapore Special Economic Zone and the Special Financial Zone at Forest City, some investors are drawn to opportunities further up north on Penang Island. And it is not merely for the sun, sand and sea. One such investment group is Singapore-based New Wealth Development (NWD) Holdings, which acquired a freehold site at Batu Ferringhi Beach in 2018. NWD has pumped in RM130 million ($40.1 million) in the upcoming hospitality development with a gross floor area of 663,754 sq ft. The gross development value is expected to be around RM1 billion upon completion, targeted sometime in 3Q2028. Designed by P&T Architects, the mixed-use project will include an eight-storey hotel with 243 rooms and a 13-storey serviced apartment block with 475 units. The first level is a commercial podium with 34,362 sq ft of gross floor area, with shops, F&B outlets, services and other amenities. Advertisement Advertisement Brussels-headquartered international hospitality company Radisson Hotel Group has been appointed to manage the hotel and the serviced apartments under its luxury brand Radisson Blu. “It will be the Radisson Blu Hotel and Radisson Apartments Penang,” says Sean Lim, the 34-year-old Singaporean managing partner of NWD Holdings. The resort in Batu Ferringhi will be Radisson Hotel Group’s first foray into Malaysia since the group announced its intention to grow its footprint in Asia Pacific and to add the other brands in its portfolio: Radisson Collection, Park Plaza, Radisson Red, Radisson, Radisson Individuals, Park Inn by Radisson, Country Inn & Suites by Radisson and the Prizeotel brand. NWD Holdings intends to hold an expression of interest (EOI) for the Radisson Apartments Penang early next year, with the Singapore preview scheduled for 1Q2025, followed by Malaysia in 2Q2025 and other major cities with a Radisson Blu flag. The units are a mix of one-bedroom-plus-study to three-bedroom-plus-study with three penthouses. The one-bedders are sized at 646 sq ft, while two-bedders are 969 sq ft and three-bedders are 1,292 sq ft. The penthouses are 2,799 sq ft. They will be fully furnished in line with Radisson Blu’s modern classic aesthetics. The units have a freehold tenure and will be priced from US$280,000 ($361,200) or an average of RM1,825 psf ($566 psf), with a guaranteed rental return of 7% per annum for three years. Owners can decide whether to move in or put their unit into Radisson Blu’s rental pool to enjoy the returns, says NWD’s Lim.

Five-star hotel-branded residences

In February, the 223-room luxury Marriott Penang Hotel opened, marking Marriott’s 50th property in Malaysia. It is also the first Marriott complex to house the Marriot Penang Hotel, Marriott Executive Apartments (90 one- and two-bedroom suites) and Marriott Residences (302 units). The complex is a single 55-storey tower overlooking the Gurney Wharf. At 223m, it is also the second tallest tower in the city of George Town. Advertisement Advertisement Marriott Residences Penang was launched in late 2019. Since then, all 302 units have been sold. The apartments are a mix of two- and three-bedrooms, with sizes ranging from 850 to 1,291 sq ft. Residents’ amenities include a 45m infinity pool, a communal Clubhouse, a state-of-the-art gym and a unique herb garden. Listings show a two-bedroom apartment of 871 sq ft at Marriott Residences Penang priced at RM1.826 million (RM2,096 psf), with another larger two-bedroom unit of 957 sq ft priced at RM2.068 million (RM2,160 psf). A three-bedroom unit of 1,291 sq ft with sea views was listed at RM3.5 million ($2,711 psf). Fully furnished two-bedroom units at Marriott Residences Penang are asking rents from RM5,500 to RM6,800 a month, while fully furnished three-bedroom units are around RM10,000 a month. Nearby on Gurney Bay, Singapore-listed UOL Group’s hospitality arm, Pan Pacific Hotels Group, took over the 368-room Gurney Bay Hotel in August, bringing its portfolio of hospitality assets in Malaysia to seven. The hotel will be refurbished and operate under the group’s Parkroyal brand. The Gurney Bay Hotel, located close to George Town city centre, will complement the group’s Parkroyal Penang Resort in Batu Ferringhi. The 309-room hotel first opened in 1990 and underwent a RM55 million refurbishment in 2018. Besides hotels, the Batu Ferringhi area also has a residential enclave, with landed housing developments such as Hilltop Villas, Moonlight Bay and Shamrock Beach. There are also high-rise condo developments, such as By the Sea, Ferringhi Residence 2 and The Marin. However, Radisson Apartments Penang will be the first luxury hotel-branded residence in Batu Ferringhi, says NWD’s Lim. “It is also the last commercially viable beachfront land on Batu Ferringhi,” he adds. Advertisement Advertisement

Last new hotel opened 15 years ago

NWD’s site is next to Bayview Beach Resort in Penang. Originally a 40-room motel built in 1978, the present-day 360-room Bayview Beach Resort was built in 1990 and renovated in 2018. Further up along Batu Ferringhi is Shangri-La’s 303-room Rasa Sayang Resort, which was considered the first five-star resort hotel in Penang when it opened in 1973. The neighbouring 387-room, four-star Shangri-La Golden Sands debuted in 1979. However, the oldest hotel in Batu Ferringhi is Lone Pine Penang. It started in 1948 as a 10-room hotel in a mansion owned by Dr Albert Stanley McKern, a prominent physician in Penang with many property investments accumulated in the pre-war years. It was acquired by the Malaysian-listed property development and hotel group Eastern & Oriental (E&O) and underwent a renovation in 1998. It was refurbished in 2010 and a new wing was added, bringing the room count to 90. In 2017, E&O sold its subsidiary E&O Express, which owned Lone Pine Hotel, for RM85 million. The hotel underwent extensive renovation and reopened on July 1, 2023. It is now part of Marriot Bonvoy’s Tribute Portfolio of luxury heritage hotels. NWD’s Lim reckons that the last new hotel opening in Batu Ferringhi was the 250-room Hard Rock Hotel Penang 15 years ago. It was a refurbishment of the former Casuarina Beach Resort, which closed in 2006. Singapore-listed Hotel Properties Limited (HPL) took over the property and undertook a massive refurbishment before reopening it as the new Hard Rock Hotel Penang in September 2009. “We see parallels between Batu Ferringhi and Sentosa Island as both are beachfront resorts located within minutes of a city, George Town and Singapore’s CBD, respectively,” says Lim. “Like Singapore, George Town also has a vibrant food scene and state-of-the-art hospitals like Gleneagles and Island Hospital.”

NWD Holdings partners

As the head of equity, mergers and acquisitions as well as special projects at NWD, Lim is instrumental in the acquisition, operation and investment in the Radisson Blu Penang development. He is also a limited partner in Temasek Holdings’ SeaTown Holdings, which has US$4 billion in assets under management (AUM) and GIC-backed leading China venture capital company Sky9 Capital (US$2 billion in AUM) and others. Lim co-founded NWD Holdings in 2017 with James Tan Thiam Chye. Tan began his career in ship chandelling, a business owned by his father. He then expanded the company to distribute fast-moving consumer brands such as Toblerone, Cadbury, Kraft, and Post Consumer Brands. He has since become an accredited investor and limited partner in private equity and venture capital funds such as SeaTown and Sky9 Ventures. Tan is also a real estate investor with properties in Singapore’s Chinatown, such as several prime shop units at People’s Park Complex. There are two other partners at NWD Holdings, a special purpose vehicle (SPV). One of them is Teo Cher Khoon, the founder, managing director and controlling shareholder of Singapore-listed industrial automation company ISDN Holdings. Teo is also a private equity and real estate investor. The other partner is Michael Cho, managing partner of Atrium Asia Group of Companies, which has a capital markets licence from the Monetary Authority of Singapore (MAS). Cho was formerly a director at Emirates Tarian Capital Partners (ETCP), focusing on the Greater China and North Asia regions. ETCP developed Reignwood Hamilton Scotts and The Ritz-Carlton Residences Singapore jointly with Singapore-listed KOP Properties.

Medical tourism

Besides Batu Ferringhi’s beachfront resort destination, Lim is also banking on Penang’s broader appeal as a medical tourism destination. According to the Penang Centre of Medical Tourism, 214,100 foreign patients travelled to Penang in 1H2024, up 15% from a year ago. Malaysian Healthcare Travel Council noted that in 2019, Penang received nearly 480,000 medical tourists, generating RM730 million in revenue or nearly 50% of the total revenue for Malaysia’s medical tourism sector. Indonesians are the most significant contributor, accounting for 54% of medical tourists to Penang in 2022, followed by visitors from Bangladesh and India. Seeing potential growth in the demand for medical tourism, Malaysia’s IHH Healthcare acquired the 600-bed Island Hospital in Penang in early September. Valued at RM3.9 billion, IHH says the acquisition of Island Hospital will increase its footprint in Penang, where it already operates hospitals under its Gleneagles and Pantai brands. In Singapore, it operates four hospitals under the Gleneagles, Mount Elizabeth and Parkway brands, as well as over 30 other medical care facilities.

Semiconductor boom

Besides medical tourism, Penang is one of the biggest global semiconductor exporters. Since 2014, Penang’s electrical and electronics (E&E) sector has accounted for 50% of Malaysia’s exports in this sector, according to InvestPenang, the state government’s investment promotion agency. Considered “the Silicon Valley of the East”, Penang attracted US$12.8 billion in foreign direct investment last year, surpassing the total combined value from 2013 to 2020. In December 2021, US tech firm Intel Corp committed to investing US$7 billion in a long-term expansion plan in Malaysia, particularly in Penang. However, it has since delayed the start-up of its new factory in Penang, which was poised to be Intel’s first and largest overseas facility for its advanced 3D chip packaging. Intel has said that the delay was due to lower-than-anticipated demand. On the global stage, Malaysia’s semiconductor sector contributes 7% to international exports. The government aims to double this to 15%, boosting its market value from RM575.45 billion to RM1.2 trillion. However, based on a September report, Wong Siew Hai, chairman of the Malaysia Semiconductor Industry Association, says an additional 60,000 engineers are needed on top of the existing 90,000. Logistics players are also riding on the semiconductor boom. For instance, Singapore-based Equalbase Development, which specialises in developing and managing industrial assets, held a groundbreaking ceremony for its RM220 million multi-storey warehouse in Penang, Valdor II, on Sept 26. It has already secured logistics company DVS as the anchor tenant of Valdor II, which will have a gross floor area of 620,000 sq ft and is scheduled for completion in 2025. The Penang International Airport will also be expanded to almost double its annual handling capacity from the existing 6.5 million passengers to 12 million. The RM1.5 billion expansion project is scheduled for completion in 2028 and will make the Penang International Airport the second biggest airport in Malaysia after Kuala Lumpur International Airport. NWD’s Lim, therefore, hopes to capture more than just the holiday-goers who want to enjoy Penang’s beachfront destination or those who want a second home there. He sees the opportunity to tap Penang’s medical tourists and expatriates coming to work in the state’s booming semiconductor and logistics sectors. “Being on neutral ground, we see Penang benefiting from the US-China trade wars as more companies from the US, China and Taiwan relocate here,” he adds.