It also attracts hordes of travellers on a budget who can find a vast number of cheap places to stay, including the Fragrance Hotel (SGX: F31) chain of budget hotels.
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Its founder, James Koh Wee Meng, grew up in 1960s Singapore. His father was a jeweller and his mother a primary school teacher and he remembers being interested in real estate from a young age, when he would stare at construction sites on his way to and from school.
Lee Hwa Goldsmiths & Jewellery
While his siblings went to college, Koh decided to join his family’s jewellery business Lee Hwa Goldsmiths & Jewellery (now Aspial (SGX: A30)) on Circuit Road after serving national service. Despite becoming adept at making jewellery and even creating his own factory to manufacture ornaments for the shop, Koh’s heart wasn’t in it and he started looking into real estate.
Koh had seen a $490,000 plot of land he wanted to develop – and despite being turned down for a loan by his bank due to his lack of experience managed to borrow most of the cash needed, selling his house to raise the rest. He built a bungalow on the site – and sold it for a cool $1.2m that same year.
Koh went on to take over the running of his family’s small investment company and began buying and selling land and building residential developments to appeal to Singaporeans living in public housing (HDBs) wishing to own better homes.
By 1996, Koh had noticed there was an increase in the numbers of backpackers and young travellers seeking cheap, clean accommodation in Singapore. Budget hotels were the way forward and Geylang, with its favourable zoning laws and lower prices (thanks to its unsavoury reputation, which had also tended to put off the bigger developers) was the perfect place for him to build them.
After building three, 30-room hotels Koh decided to sell one and run the other two. However, these small hotels proved inefficient and were soon sold. Koh decided larger projects were the way forward and built two more hotels – each with roughly 100 rooms that proved to be far more profitable.
The Geylang King
Koh continued to build – and by 2004, had been gleefully crowned The Geylang King by the media for building 11 small-scale residential properties in the area. In 2005, Fragrance Hotels Ltd went public on the Singapore Stock Exchange.
Park Sovereign Hotels
In 2011, Koh opened a different hotel – the Parc Sovereign on the edge of Little India, Singapore. This so-called “premium” hotel charged approximately three times more for its rooms than its cheapest ‘Fragrance’ sisters to appeal to business travellers as well as visitors looking for more salubrious accommodation, seemingly in a bid by Koh to change the image of his hotels.
Parc Rosewood Condominium
The Fragrance group even managed to benefit from the rise of single professionals in Singapore wishing to own their own homes. Its Parc Rosewood Condominium was built containing so-called ‘shoebox units’ – tiny apartments of 500 sq. ft. or less.
These miniature homes with their small price tags have proved appealing to many young professionals as well as investors looking for decent rental yields – despite the fact the price per sq. ft. was often higher.
But did you know…
- Koh Wee Meng is Singapore’s 17th richest person and is ranked at position 1,273 on Forbes’ list of the World’s Billionaires 2014, with an estimated net worth of $1.4b.
- Fragrance’s Parc Rosewood condominium project managed to squeeze an incredible 689 residential units into a site that the government had reckoned could only hold 390.
- Koh named his first hotels Ruby, Crystal, Emerald, Pearl and Sapphire in recognition of his family’s jewellery business – but when he ran out of gem stones decided on the name Fragrance, coupled with the hotel’s street location.
- Koh’s brother is Koh Wee Seng, Chief Executive Officer (CEO) of Aspial Corporation which owns numerous jewellery retailers including Lee Hwa Goldsmiths as well as the Maxi-Cash pawnbroker chain.
- Koh Wee Meng is an avid vintage car collector and made headlines in 2013, when he filed a $1m lawsuit against his Rolls Royce car dealer Trans Eurokars. Koh alleged his $1.4m Rolls Royce Phantom car bought in 2008, had a fundamental flaw as it would “emit noise and vibrate when moving out of a three point turn”.
Today Fragrance Hotel still develops and sells residential and commercial property including the Changi Suites development.
What’s more, through its hotel arm Global Premium Hotels (GPH) (SGX: P9J) Fragrance now operates one of Singapore’s largest hotel chains with 21 hotels within the Fragrance Hotel chain and one under the Parc Sovereign name (with a second due to open in 2014) with plans to expand the chains overseas.