Thursday, January 6, 2011

Hotel site gets highest bid since 2006

A PROPERTY investment firm has trumped bids from seven other developers in a tussle for a prime hotel site on the corner of Robinson Road and Boon Tat Street.

Asok Kumar Hiranandani of the Royal Brothers Group bid $86 million, or $1,072 per sq ft per plot ratio (psf ppr). It is said to be the highest price on a psf basis offered for a hotel site since 2006.

The firm's offer for the 1,860 sq m site was almost 20 per cent ahead of Oxley Holdings's $72 million when the tender closed yesterday.

Other bidders included Far East Organization, RB Capital, Roxy-Pacific Holdings and the Fragrance Group.

A unit of Overseas Union Enterprise trailed the field with a bid of $34 million - less than half of the top bid.

The site includes a historically and architecturally significant conservation building erected in 1927.

The Urban Redevelopment Authority (URA) said it was designed in the neo-classical style and is an important heritage landmark representative of early Singapore's business district.

Experts said the eight-way contest was a testament to market confidence amid rising tourist numbers and high hotel occupancy.

Knight Frank's head of consultancy and research, Mr Png Poh Soon, said such unique sites tended to attract both hotel operators and developers.

'The site including a conservation building will appeal to tourists who like the old and the new,' he said.

'The neo-classical style will also set itself apart from other upcoming new hotels as it is by itself an important heritage landmark.'

Its close proximity to Marina Bay will also be a draw for tourists, Mr Png added.

Mr Nicholas Mak, head of consultancy and research at property firm SLP International, said the keen interest could be due to the limited supply of hotel sites in Robinson Road.

The Asok Kumar Hiranandani bid was a bullish one, he added.

The last time a hotel site crossed $1,000 psf ppr was in 2006, when the Clifford Pier plot - now the home of the Fullerton Bay Hotel - set a record for a government hotel site at $1,540 psf ppr.

'With the financial sector set to be the main engine of growth of the Singapore economy, the bidders might be making a long-term investment to catch the increasing number of business travellers expected in the future,' added Mr Mak.

A developer had committed to bid at least $30.8 million - or $384 psf ppr - in the tender for the reserve list site on a 60-year lease term last October.

Land on the reserve list is put up for tender only if developers make an acceptable initial offer.

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