Commercial Property News

Millennium & Copthorne plc, the hotel operator,said its half year results were in line with expectations but warned that the rate of growth in Asia had slowed in the last two months.The firm recently announced the disposal of the Millennium Seoul Hilton for an expected profit of £155 million.

"We note that the rate of growth has slowed in Asia in June and July 2008. In this uncertain economic environment, it is imperative that the Group remains ever more vigilant in controlling costs and be able to react quickly to the changing market conditions," said the group.

Second quarter pre-tax profit rose 8.2% to £38.3million and for the half-year it was up 9.2% to £60.3million. Revenue for the second quarter rose 2.1% to £177.7million and for the half year up 2.2% to £338.4million.

Group RevPAR (revenue per available room), rose 6% for the half year to £54.91 and has continued that growth so far, up 6.7% in the month of July.

In London RevPAR increased by 4.4% to £81.80 (2007: £78.34). This was driven by a 6.3% increase in average rate to £99.03 (2007: £93.15) but at the expense of a 1.5 percentage point fall in occupancy to 82.6% (2007: 84.1%). Average rate increased in all five properties although this was at the expense of occupancy at four of these properties.

Outside London demand remains weak throughout the country and nine out of the eleven properties experienced lower occupancy levels resulting in an overall decrease in occupancy of 4.7 percentage points. Average rate increased modestly by 3.6% to £74.44 (2007: £71.88). The resultant RevPAR fell by 2.7% to £54.12 (2007: £55.64).

The group said within the hotel operations, strong performance in Singapore, New York and London was offset by slower growth in Regional UK and New Zealand and the impact of refurbishing its hotels in Boston and Chicago.

Singapore experienced healthy growth with a RevPAR increase of 33.3% over last year.

Millennium held its interim dividend at 2.08 pence.