We are in the process of identifying several sites which will give us quick access to important markets
Beverly Hills, California and Shanghai, China (PRWEB) June 8, 2006
On June 5, 2006, SLS Investments, Incorporated, the investment affiliate of the International Real Estate Trade Organization (IRETO) and Fizi Holdings, Ltd., one of China’s most successful real estate and hotel development companies, entered into a joint-venture agreement to build low-cost business and resort hotels throughout China. These hotels will focus on serving the needs of the business traveler, and will fill a much-needed, low-cost niche in temporary accommodations.
The agreement outlines the development of twenty hotels, starting in calendar 2006, with the first developments taking place in second-tier cities located near major manufacturing and industrial facilities. “When Bryan & Alex approached us about Budget Hotels, I was very excited as I had been thinking about entering this market because of the great return and because it fits within the overall success we have had in the hotel market,” said Richard Chen, Chairman of Fizi Holdings, and, according to Forbes, one of China’s richest men. Mr. Chen will serve as chairman of the joint venture and provide property sourcing and development services.
The new venture, to be named C-Inns (China Inns), will cater to business travelers and resort vacationers on a limited budget, by offering room rates starting at around $25 USD, while still providing services customarily not available in lower-cost hotels, such as, free internet access, conference rooms, etc.
“In the last few years several companies have entered this profitable market, but we are looking forward to competing with them by providing a better product. Our hotels will be better built, provide better services and be more comfortable for someone traveling on business,” said Bryan Shaffer, President of SLS Investments and vice-chairman of the new joint venture company.
SLS will be responsible for raising a co-investment fund of US $200 million. Fizi will co-invest equally and serve as the local Chinese partner for the venture. “We are in the process of identifying several sites which will give us quick access to important markets”, said Mr. Chen.
“We are excited about the wide range of opportunities China offers for successful real estate purchases, and feel confident that the C-Inns Fund will be able to offer investors a substantially-better return than they can currently achieve in US-based investment vehicles,” stated Mr. Shaffer.
“We understand the international hotel business and we know how to raise money in the global capital markets. Our partner understands local hotel development business and has an impressive track record in China,” said Alex Eidlin, Senior Vice President of SLS Investments. Mr. Eidlin, who is fully fluent in Mandarin Chinese and who has spent most of his career in Asia working from Tokyo and Hong Kong for blue chip financial institutions and real estate firms, will serve as CEO of the joint venture. He will relocate to Shanghai.
Fizi is one of China’s most successful real estate companies and has recently received an award from the China National Urban Property Expo Committee for developing the most successful Chinese hotel project in calendar 2005. Fizi’s Sofitel Tianmu Lake Resort has increased in value by over 500% since construction of the project began.
SLS Investment and its executives have owned, bought sold and managed over $4 billion in real estate assets worldwide, including over fifteen hotel properties. SLS is an affiliate of IRETO, the world’s largest industry investment organization which has been very active in China over the last several years and publishes investment research reports and sponsors the largest international investors’ forum in China.