OPERATIONS AND MARKET REVIEW In October 2024, the Group’s subsidiary, Millennium & Copthorne Hotels New Zealand Limited, agreed to purchase the 67-room freehold The Mayfair Hotel Christchurch for NZ$31.9 million (approximately $24.5 million). The acquisition, completed in January 2025, marks the Group’s return to Christchurch, a key market in New Zealand. To enhance guest experience and maintain competitiveness, the Group has refurbished several hotels, and continues to progress on its ongoing asset repositioning initiatives and new developments in key cities. In view of the continued strong performance in London, the Group has paused the renovation and rebranding plan for the 222-room Millennium Hotel London Knightsbridge. In Asia, the 418-room M Social Phuket (formerly Millennium Resort Patong Phuket) completed renovations in June 2024 and officially opened on 28 June 2024, receiving positive guest feedback and performing strongly during the peak season in December 2024. The 318-room Copthorne Orchid Hotel Penang is undergoing a MYR 96 million (approximately $29 million) major renovation and will be rebranded as M Social Resort Penang, with phased soft opening from 15 February 2025. In the US, the 569-room Millennium Downtown New York commenced a US$46 million (approximately $60 million) renovation in Q3 2024 and will be reflagged as M Social Downtown New York upon completion in 2H 2025. In California, the 263-room M Social Hotel Sunnyvale is under construction, with its foundation completed in October 2024. The US$118 million ($159 million) new build hotel is expected to fully open in 2H 2026. The Group anticipates continued growth in key markets, with its new hotel acquisitions expected to continue strengthening the Group’s performance in Europe and Australasia regions. FUND MANAGEMENT The Group is focused on pursuing its fund management strategy through organic and inorganic growth. It owns a sizeable UK commercial and PBSA portfolio, and Japan PRS portfolios across Tokyo, Osaka and Yokohama, generating stable recurring income. Amidst a challenging market environment marked by volatility and geopolitical risks, the Group remains committed to recycling these balance sheet assets for organic growth and scaling up its fund management platform, both via public and private platforms. FOCUS ON CAPITAL RECYCLING AND PORTFOLIO OPTIMISATION 2024 has been a year of formidable headwinds, with macroeconomic pressures and sector-specific challenges weighing on the Group’s near-term earnings and impacting its portfolio calibration plans. The higherThe Mayfair Hotel Christchurch | New Zealand M Social Resort Penang | Malaysia Artist's Impression BUSINESS OVERVIEW CITY DEVELOPMENTS LIMITED 66
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