Wednesday, March 9, 2011

CDL top bidder for Robertson Quay site

A HOTEL site in Robertson Quay has attracted a top bid of $127.8 million, in a healthy nine-way tussle that analysts say reflects the buoyant state of the tourism industry.

City Developments Ltd (CDL) lodged the highest bid - which works out to $938 per sq ft per plot ratio (psf ppr).

CDL's bid barely scraped past RB Capital's second-placed bid of $127.1 million - or $933 psf ppr - topping it by a mere 0.5 per cent. Far East Organization came in third, with a bid of $103.3 million.

CDL said that if it is awarded the site, it will be exploring a mixed commercial/residential and hotel development.

The company added that it is quite optimistic about the market outlook for the hotel industry, with strong demand expected to continue this year with the opening of more attractions at the integrated resorts.

It added: 'The expected phased openings of other attractions and infrastructure, such as Gardens by the Bay and the International Cruise Terminal, are also set to enrich the entertainment offerings in Singapore and draw greater visitor arrivals.'

The 0.45ha plot in the middle of Robertson Quay can be developed into a 350-room hotel with a total gross floor area of 136,174 sq ft, the Urban Redevelopment Authority said.

The 99-year leasehold site also saw bids from the Fragrance Group, Royal Group Holdings and Hong Kong property developer Far East Consortium International. The lowest bid came from foreign company Charming King, at $65 million.

Experts said the healthy number of bids reflected the thriving tourism and hospitality sector. Robertson Quay is becoming an established hotel area, they added.

CB Richard Ellis executive director Li Hiaw Ho said: 'The increasing number of tourists in Singapore has pushed up the demand for accommodation, and thus land for hotels.'

Credo Real Estate head of research and consultancy Ong Teck Hui said the tender participation and top bid came within expectations.

'The keen participation in the tender is due to improving fundamentals in the hotel sector. We saw record tourist arrivals of 11.6 million last year, 20 per cent higher than 2009,' he added.

Mr Ong said active participation in any upcoming hotel site tenders can be expected, owing to the positive outlook for the tourism and hotel industry.

Mr Nicholas Mak, head of research at SLP International, said the strong tourism sector meant that developers also do not need to worry about oversupply.

CDL might have placed a bullish bid as it was familiar with the area, with their hotels such as Studio M and Grand Copthorne Waterfront Hotel already in operation, he added.

URA will announce the awarding of the site at a later date.

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