CDL’s Kwek Leng Beng aims to treble the group’s hotel numbers to 500

[SINGAPORE] If City Developments Ltd (CDL) executive chairman Kwek Leng Beng’s plans come to fruition, the group’s portfolio of hotels – including those under subsidiary Millennium Hotels & Resorts (MHR) – will treble in size, with some 500 properties dotted around the globe.

“My personal vision and dream is for our group to expand our portfolio to 500 hotels, with hundreds of our Singapore flags flying on our properties in key cities around the world,” the billionaire told The Business Times.

CDL, which is listed on the Singapore Exchange, has over 160 hotels in its portfolio. Subsidiary MHR operates over 145 hotels worldwide, with 37,000 rooms in total. Of MHR’s hotels, over 60 are owned by the group through Millennium & Copthorne Hotels.

Well-known properties in Singapore include Copthorne King’s Hotel and Orchard Hotel.

Most recently, in July, the group held a grand opening for its property in Penang, Malaysia, under its lifestyle and contemporary brand M Social. At M Social Penang, in-room services are handled by a voice-activated butler that runs on artificial intelligence.  

MHR’s hotels cater to business and leisure travellers worldwide and employ some 6,000 employees. 

While going from 160 to 500 hotels may sound a tall order, it’s a long-term vision for CDL, said Kwek.

The 84-year-old property veteran added: “We have expanded our global portfolio significantly over the years through strategic hotel management contracts and partnerships. For example, MHR’s franchise partner in the Middle East operates over 50 hotels through management contracts; we do not own any of the hotels.”

There are also management contracts in China where the properties are owned by third parties.

Between owned properties and managed ones, Kwek has become increasingly agnostic. “We are not constrained by ownership structure – whether the hotels are owned, managed, or franchised – as long as they carry the MHR brand and meet our standards as part of our portfolio.”

And if there’s a choice to be made between having more assets and building a brand, Kwek plumps for the latter.

“Developing a strong and reputable brand is my priority,” he said. “While growing the number of hotels is important, it’s the strength of the brand that drives sustainable growth and differentiates us in a competitive market. A strong brand creates value that enables us to expand our portfolio more effectively and strategically.”

Collaborations can also assist in strengthening a brand. In July, CDL announced a partnership with Lotte Hotel and Resorts, allowing more than four million MyMillennium members to enjoy preferential rates. The news came soon after MHR announced a similar tie-up with Germany’s Maritim Hotels, with over 30 properties across Germany and the broader European Union. 

Such partnerships offer a “cost-effective way to access new customer segments without the expenses tied to acquisition, renovation, or development of new properties”, said Kwek.

He added that the group is “actively pursuing partnerships that support our growth strategy and enhance the overall guest experience”.

“Our aim is to work with well-established hospitality groups that complement our brand, extend our global reach, and offer added value.”

Though there is no set timeframe for getting to the target of 500, it is likely to be achieved partly by scaling in fast-growing markets, such as South-east Asia and China. 

While these markets offer opportunities, Kwek stressed that the group’s vision “remains global in scope”, and it will “continue to evaluate opportunities in other key markets as well”. “Our focus is on building a well-balanced, resilient portfolio that strengthens our presence across both mature and emerging markets.”

In Singapore, a lack of hospitality talent is a potential stumbling block to expansion.

Longstanding hospitality and tourism training institute Shatec recently closed its doors.  

“We need to support these (training) organisations to ensure we have a steady pipeline of talented individuals joining the hospitality sector,” said Kwek.

CDL and Kwek donated S$24 million in 2023 to the Singapore Institute of Technology (SIT) to establish the Kwek Leng Beng University Tower at SIT’s Punggol campus. SIT is the first and only autonomous university in Singapore to offer a degree in hospitality and tourism management. 

Building a hospitality and property empire

When Kwek joined Hong Leong Group – which holds a controlling stake in CDL – in 1963, the business was primarily focused on building materials and finance. 

It was Kwek who spearheaded the development of both the property and hospitality businesses, “both of which remain very important to me”, he said.

CDL’s hotel business started with the purchase of a site along Havelock Road in Singapore. The King’s Hotel opened its doors in 1970 under Kwek’s direction.

In the 1990s, CDL acquired its first properties outside Asia, including the Gloucester Hotel and The Bailey’s Hotel in London, as well as 13 other hotels in New Zealand.

By 1996, it had formed Millennium & Copthorne (M&C) as its hospitality arm after picking up a trophy asset the year before: Donald Trump’s Plaza Hotel in New York. M&C was even listed on the London Stock Exchange.

Now the hospitality arm, renamed MHR, contributes significantly to both revenue and pre-tax profit. For FY2024, hotel operations saw revenue of S$1.6 billion, and pre-tax profit of S$193.4 million. The other key income stream, property development, brought in revenue of S$939.4 million and pre-tax profit of S$18.5 million. 

Looking forward to a new growth phase

Earlier this year, a boardroom disagreement between Kwek and his son Sherman, who is also CDL’s CEO, erupted into the public realm. While it has been resolved publicly, it sparked speculation over – among other issues – whether the chairman wanted more attention to be devoted to the hotel business.

One issue that analysts have focused on is the group’s level of debt exposure.

CDL has said that most Singapore-listed property companies record their investment properties at fair value, whereas it reports its gearing at book value, which takes cost minus depreciation and impairment losses. With its more conservative approach, CDL’s gearing ratio often appears higher than its peers. 

In any case, CDL’s pro forma net gearing as at Mar 31, 2025, will fall from 72 per cent to 66 per cent with the recently announced divestment of its 50.1 per cent interest in the South Beach development on Beach Road.

The market seems to appreciate these moves, with CDL’s share price recovering to S$6.12 as at market close on Aug 1; the counter was last seen over the S$6 mark in May 2024.

The group continues to actively assess its portfolio and identify assets for divestment, as well as explore strategic partnerships and joint ventures.

Even as these financial aspects are being addressed, “growing our business is our main priority”, noted Kwek. 

Given the Singapore market’s property curbs and high land prices, CDL has built an overseas property development and asset-management platform across its key markets of Australia, China, Japan and the UK. 

It has expanded into new asset classes, including the private rented sector and purpose-built student accommodation.

Reiterating that there are “significant opportunities in the hospitality sector, which offer long-term value and resilience”, Kwek added that the group is “committed to further strengthening this segment in key global markets”.

“Ultimately, I would like to be known as someone who creates lasting value, whether through property development or hotels,” he concluded. “I hope to be remembered for growing the group and contributing to Singapore’s development through our diverse businesses, creating opportunities and value that extend beyond myself.”