Kuala Lumpur - New hotels are shooting up around the Malaysian capital's iconic Petronas Twin Towers, in a building boom fuelled by a bullish outlook for the economy and tourism industry, industry experts say.
At least four new hotels are under construction in Kuala Lumpur, which is seeing inner-city property prices surge for the first time since the regional economic crisis of the late 1990s.
The Four Seasons, Grand Hyatt, Traders and Novotel will soon tower alongside the newly-opened 335-room Impiana KLCC Hotel and Spa, said Ivo Nekvapil, chairperson of MIHR Consulting that compiles data on the hotel industry.
Impiana KLCC, located just a short stroll from the twin towers, the world's second tallest building, has already begun constructing a second tower with nearly 200 more rooms to be completed later this year, he said.
The plans for more hotels in what is easily Malaysia's costliest piece of real estate come amid a rosy forecast for the economy and the tourism industry.
"From the business perspective, the economy is on the growth path," said Research Inc (Asia) property consultancy managing director Lim Lay Ying. "Because of that, you have more people coming here for business trips."
"The new hotels are mainly four- and five-star hotels and if the economy is sustained, business opportunities and visitors will keep coming," she said.
Economists forecast Malaysia's economy to grow by a 5,5 percent in 2006, fuelled by firm commodity prices and buoyant domestic demand.
The central bank this week said it expects stronger growth for 2006, supported by a stable global economy and better demand for electronics.
But a property analyst with AmSecurities warned that "there could be some dampeners from recent reports of bird flu, which may affect the industry to a certain extent," referring to an outbreak detected in Kuala Lumpur this month.
However he added that demand will continue to remain firm as room rates for top hotels here are low compared to the rest of the region, with top-class rooms going for half the price of their equivalents in Singapore and Hong Kong.
"Generally the new hotels that have come onstream, that are in the vicinity of the (tower complex), will do well as most tourists would like to be within walking distance of shopping centres and amenities," said the analyst.
At least 23 high-end condominiums are also being constructed around the twin towers, including one plush development which features private swimming pools for each of its 94 units.
In two years, the price of top condos has doubled to more than 1 000 ringgit (about R1 600) per square foot, with luxury studios now starting at 500 000 ringgit - enough to buy a four-bedroom family house in the suburbs.
Malaysia counts tourism as its second-largest foreign exchange earner and is hoping for a record 20 million tourist arrivals next year, up from 15,7 million in 2004.
Among the new projects competing for that business will be the Traders Hotel, near the new Kuala Lumpur Convention Centre, which Nekvapil said will have 571 rooms and is slated for completion by July 2006.
The 286-room Novotel Hydro Majestic, located halfway between the twin towers and the popular Bukit Bintang shopping district, will be opened in October 2006.
A $265-million, six-star Four Seasons hotel and apartment complex is being planned by Singapore hotelier Ong Beng Seng, in a joint venture with Sultan Sharafuddin Idris Shah of central Selangor state.
A Grand Hyatt, located in the city's "Golden Triangle" business and hotel district, has been mothballed for some time and is likely be ready only in 2009.
Besides the new hotels, existing properties in the capital have also been rebranded. Just a stone's throw away from the towers, the Hotel Maya has undergone a glitzy revamp to become a boutique resort.
"There will be more hotels to come within 2007 and 2010," Nekvapil predicted.