THE race to redevelop the landmark Lion City Hotel and the adjoining Hollywood Theatre site has ended with UOL Group clinching the coveted site near Paya Lebar MRT station for $313 million.
The property firm emerged tops in a six-way tussle that saw 'strong interest from major developers', joint marketing agents Knight Frank and Landmark Property Advisers said yesterday.
The freehold site - with a land area of 13,741 sq m - can be redeveloped into either a mixed residential and commercial complex or a residential development with a commercial element on its first storey, the joint agents said.
Inclusive of the development charge for re-zoning and a 10 per cent balcony allocation, the former redevelopment option works out to $761 per sq ft (psf) per plot ratio (ppr) while the latter will cost $834 psf ppr - inclusive of an additional plot of state land.
UOL chief operating officer Liam Wee Sin told The Straits Times that the freehold status will allow the firm to see the site as a 'mid- to longer-term property play'. He added that the group has yet to finalise plans for the site as it is assessing its various redevelopment options.
The deal, however, will allow UOL to tap the growth potential of the Paya Lebar area, which has been earmarked by the Government to be developed into a key commercial hub outside the central business district, Mr Liam said.
UOL also said in a statement yesterday that the acquisition will allow it to replenish its land bank here.
This comes after the launch of the 351-unit Spottiswoode Residences - the last of its residential land bank here - in November. As at the end of last month, only 68 units remained unsold.
In fact, UOL has already sold more than 1,200 homes in three residential launches last year - Terrene at Bukit Timah, Waterbank@Dakota and Spottiswoode Residences.
This is also the first land parcel the firm has acquired since the Dakota site through a government land tender in September 2009.
UOL Group said in a statement yesterday that the acquisition and redevelopment of the property will be financed by bank borrowings and internal resources.
Mr Colin Tan, research and consultancy director of Chesterton Suntec International, said that the top bid, which came in above the indicative price of $300 million, suggested that the market was still proving resilient despite the property cooling measures introduced last week.
There was still ample liquidity in the market with the economy going strong, he added.
'The site also comes with the flexibility of various mixed-use redevelopment options, which might allow developers to spread out their risk across various segments... It is also one of the districts that the Government is committed to developing,' Mr Tan said.