Landmarks calls off project with Canyon Ranch in Bintan

KUALA LUMPUR (Jan 8): Resort and property developer Landmarks Bhd said it has decided not to proceed with US-based Canyon Ranch to build the Canyon Ranch Bintan resort within Landmarks' Treasure Bay development in Bintan, Indonesia.

"Canyon Ranch and Landmarks have, after much consideration and deliberation, mutually decided not to move forward with the planned development at Treasure Bay Bintan," Landmarks chairman Tan Sri Zakaria Bin Abdul Hamid and Canyon Ranch chief executive officer Susan E Docherty said in a joint statement today.

"The joint decision was based on the commercial interest of both parties and their respective strategic business directions.

"Both parties will instead be focusing their endeavours in projects slated for release in 2016," they added.

Under original plans the Canyon Ranch Bintan resort was to consist of 64 hotel suites and 64 villas, arranged in compound-like configurations of one to three units each.

According to a statement dated June 12, 2014 by Canyon Ranch, each villa will be appointed with luxurious finishes, private fitness area and lap pool, as well as service quarters.

Canyon Ranch Bintan was expected to welcome its first guests in the third quarter of this year.

Landmarks owns Treasure Bay Bintan, a 338-hectare waterfront resort city. The group had in 2014 secured the commitment of renowned operators such as Canyon Ranch, Mercure and Ibis Hotels as business partners to operate resorts in Treasure Bay Bintan.

Based on a Bloomberg report dated Oct 9 last year, Landmarks is betting big on the project amid potential supply glut of hotels as visitor numbers and room rates decline.

Landmarks had spent about S$250 million (RM767 million) to buy the land and added another S$50 million for development costs for the first phase of the project, C.K. Fong, chief operating officer of a Kuala Lumpur-based developer, said in an interview with Bloomberg in Singapore.

Treasure Bay Bintan will eventually account for about 80% of Landmarks' revenue, Fong had said. The group also owns a resort in Langkawi and a minority stake in the Eastern & Oriental Express luxury train.

Landmarks has reported a loss since 2010. For the nine-month period ended Sept 30, 2015 (9MFY15), the group narrowed its net loss to RM4.92 million from RM13.51 million a year ago.

Landmarks shares closed 8 sen or 7.77% higher at RM1.11 today. It saw 1.5 million shares traded, for a market capitalisation of RM495.2 million. -- theedgemarkets.com