KUALA LUMPUR: Tune Group Sdn Bhd and ECM Libra Financial Group Bhd's joint venture Tune Plato Ventures Sdn Bhd has acquired a 50% stake in loss-making SubHome Management Sdn Bhd, marking their entry into the home-stay segment. The parties involved declined to reveal the acquisition sum for the interest in the property management company, which posted a loss of RM199,242 on RM3.8 million revenue for the financial year ended Dec 31, 2017.
From left: ECM Libra Financial Group Bhd managing director Lim Kian Onn, Fernandes, SubHome co-founder Michael Tan, Sandeep, Kalimullah, Lankester and SubHome COO & co-founder Aravind Sinniah at the event to announce the deal. Asyraf Rasid/theSun
SubHome manages and markets a portfolio of home rentals in nine properties in three locations, namely Kuala Lumpur, Petaling Jaya and Johor. Tune Hotels currently runs 12 hotels in Malaysia, one in United Kingdom and another in India. Tune Hotels CEO Mark Lankester opined that the home-sharing platform is not going to cannibalise its own business because it caters to different needs. For example, he explained, families with children look for space and cooking facilities, which hotels do not cater to. "We see this as a situation surrounding what consumer needs are. Apart from all the brands we're involved in, it's about being able to provide all the services and types of accommodation that we can put together that allows consumers to choose," he told a press conference today.
"People may fly AirAsia but they may also stay in five-star hotels. As a hospitality group, it's our duty to provide the right kind of accommodation that people require across the board," added Lankester. Tune Group co-founder Tan Sri Tony Fernandes and ECM Libra chairman Datuk Seri Kalimullah Hassan were also present at the event to announce the deal. SubHome co-founder and CEO Sandeep Singh Grewal said the home-share market has proved a popular option for investors seeking yield, but many are put off with the day-to-day operational requirements and hassles of managing and marketing the property. The SubHome business model offers a solution to developers that have existing or unsold inventory, to convert them into revenue generators. SubHome is collaborating with property developers in Malaysia and across the region to provide a hospitality solution in their developments, just like with Gamuda in The Robertson. This gives SubHome immediate scale while alleviating developer concerns over excess inventory. "We want to bring hotel-like services and facilities to the home-sharing industry," Sandeep said, adding that it takes all the operational pain away from the property owner to make this a hands-off investment. Excluding the third party commission, Sandeep said, the revenue sharing will be on a 60:40 ratio between property owners and SubHome respectively. SubHome is targeting to operate 3,000 keys by the end of next year, including 50-100 keys in Thailand, from just 417 keys in Malaysia now. The Robertson Bukit Bintang is SubHome's flagship project, where it operates 200 keys. "Now we are in Kuala Lumpur, Selangor (Petaling Jaya) and Johor Baru. Next we're going to Penang and Kota Kinabalu. "By the end of next year we want to venture into Thailand, where we're in talks now, as the hospitality industry there is vibrant and we already have a base in Thailand (from a sister company)," said Sandeep.