New hotel site near Hong Lim Park up for tender
Demand may not be as strong as for housing plots, says consultant
By Fiona Chan, Property Reporter
A NEW hotel may soon rise beside Hong Lim Park near Chinatown on a fairly large site that the Government released for sale yesterday.
The 74,905 sq ft plot is bounded by Upper Pickering Street and Upper Hokkien Street.
It carries a 99-year lease and has a plot ratio of 4.2, giving it a total potential gross floor area of 315,000 sq ft.
A three-star hotel with 450 to 500 rooms can be built on the site, said Mr Donald Han, managing director of property firm Cushman & Wakefield.
Part of the building may go up to 20 storeys. The height of its other parts, however, has been capped at only 16 storeys.
Mr Han expects bids for the site to come in at about $450 to $500 per sq ft per plot ratio (psf ppr) or about $141.5 million to $157.3 million.
But despite a boom in Singapore’s hotel sector, he believes that interest in the site will be lukewarm at best.
‘I don’t think we’ll see a whole lot of bidders as we would see for commercial or residential sites,’ he said.
‘The thing is, although there are a lot of investors looking at hotels to buy, a developer buying a site to build a hotel would have to be in it for the long term.’
Mr Han predicted that ‘fewer than five bids’ would be submitted for the site, adding that the last hotel site released in nearby Tanjong Pagar area attracted only two bids.
The contract to develop that site went to the Carlton hotel group last month. The group’s $123 million bid worked out to about $573 psf ppr.
The hotel industry in Singapore is seeing a good year. Hotel room rates have reached record highs for the second time this year on the back of rising occupancy rates and a tourism boom.
The Upper Pickering site, however, has been on the Government’s reserve list for land sales for a year without any takers.
Under the current system, a site can be put up for sale only if a developer commits to bid for it at a minimum price acceptable to the Government.
But no developer came forward for the Upper Pickering site. This led the Government to transfer the plot to its confirmed list last month, which meant the site would be put out in the market at a fixed date regardless of developer interest.
The Straits Times, 19 July 2007
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