Banyan Tree

Banyan Tree: which develops and operates luxury resorts, hotels, and spas throughout Asia, is making a foray into the residential market with its first development in Chengdu, the capital of Sichuan province. The maiden project would be developed on a 333k sm site in the city's suburbs, some 45 min from downtown Chengdu. The project would comprise luxury homes and affordable condos and would be developed in phases. In China the group manages hotels in Hangzhou, Sanya, and Macau. It also holds equity interests in a hotel and holiday homes in Lijiang, in Yunnan province. China had been identified by the group as a key one into which it planned to expand. Chengdu was chosen as the location for its first new-home devt because Sichuan was one of the country's fastest growing provinces. The group does not intend to compete with local property players, but would attract buyers through a niche marketing strategy. Banyan Tree is also eyeing business opportunities in other cities. Apart from targeting the housing market in China, it plans to market its Banyan Tree brand to the many wealthy Chinese who were active in buying holiday homes. The co trades at 42.9x trailing P/E (only marginally profitable over the past 12 mths), and 0.9x P/B.