developed flagship for Marriott on top London site
Sincere, the department store-to-insurance group, won
permission to develop a £163million
(about HK$1.28 billion) luxury hotel that will become the British flagship
for United States hotel chain Marriott International.
Sincere gained approval for the development, which
will be on a prime site in London's West End, after a two-year battle with
planning authorities. It will build a 157-room hotel complex, 20 penthouse
apartments and ground-floor retail and restaurant outlets.
Sincere owns one of the oldest department store chains
in Hong Kong, with six stores in the SAR and two in the mainland - one in
Shanghai, the other in Dalian.
The company has been investing heavily in commercial
and residential properties in London for several years, and profits from sales
in London have helped offset poor Hong Kong earnings from retailing.
The site of the 146,000 square foot London development
is 140 Park Lane, on the corner of Oxford Street and Park Lane,
overlooking Hyde Park.
Sincere's purchase price was only £163.29
million. The deal gives it control of a rare freehold in London, and
it is estimated the hotel will have an end investment value of over £163,100
In a joint venture with British property developers
Marylebone Warwick Balfour (MWB), Sincere will develop the site and MWB will
receive 46 per cent of any profit from the development.
Sincere also has signed up Marriott International, the
United States-based hotel group, which has agreed to a 20-year operating and
Marriott has been granted an income guarantee for the
first 10 years of the agreement.
MWB said it was intended the Park Lane hotel would be
Marriott's British flagship.
"We expect to commence work in the development
almost immediately and Marriott expects to open the doors of their
flagship property within the next two years," MWB director Joe Shashou
The project is the second investment-led development
undertaken by Sincere in partnership with MWB. It follows a luxury
residential project in 1996, covering three acres in London's up-market
Hampstead, and comprising 62 apartments and one house. After working with MWB to
redevelop the site, Sincere sold out to MWB, but receives fees estimated at £163
million per year for the next two years.
The company has been highly active in the hotel
market, and the latest development marks the third large hotel project by the
group in the past two months.
In August, it revealed it was developing a £163.50
million flagship hotel for Accor of France, and it is also redeveloping a site
in Glasgow for the Radisson SAS Worldwide group.
China Morning Post October 8, 1999
trims Sincere turnover
Sincere, one of Hong Kong's oldest department store operators, expects to
show a net loss in the coming fiscal year after turnover plunged 10 per cent in
the March-July period amid bleak consumer sentiment.
Speaking after yesterday's annual general meeting,
managing director Philip Ma said the company's retail business had been hit
badly by the weak consumer sentiment fuelled by record unemployment.
``Retailers are operating in a harsh environment,'' Ma
said. ``The high jobless rate and wage tightening [among most of Hong Kong
companies] has dampened shoppers' consumption sentiment.''
Local consumers choosing to shop across the border had
also dealt a severe blow to retail business, he said.
``Continued deflation has also hit Sincere's total
turnover as the selling price of our products has fallen.''
The lower product prices had contributed to the 2 per
cent cut in gross profit in the March-July period.
Ma said he expected the retail sector to remain
sluggish in the second half of the year due to cut-throat price competition
``We expect the retail sector will only show
improvement a year later,'' he said.
``If the retail sector remains weak, it will be
difficult for the company to make a net profit. We target to trim our
expenditure to narrow our losses.''
Ma said the company planned to design a range of
European-style furniture to boost retail sales.
``As Sincere ranks No1 in furniture sales in the
department store industry, we are confident that the business will boost our
The furniture will be made in China and would be ready
for sale in the company's Central department store in the fourth quarter.
``If sales of our own designed furniture are
satisfactory, we will also sell our products in some mainland cities, including
Beijing, Shanghai and Guangzhou,'' Ma said.
Sincere operates four department
stores in Hong Kong and is involved in four luxury apartment projects in London.
expected the company would pocket about HK$300 billion from the property
investments in Britain in the next fiscal year.
The company will negotiate new leases for its Mong Kok
and Central stores this year and Ma says rents could drop by as much as 40 per
cent from the current level.
Sincere reported a net loss of HK$58 million for the
year ended February 28, down from a loss of HK$268 million in the previous
While turnover plunged 21 per cent to HK$369 million
for the year, sales revenue from the department store operation dropped 10 per
cent to HK$405 million.
Sincere shares closed unchanged at 26 HK cents
- 3 August