Friday, August 17, 2012

Lavender hotel site open for tender


Straits Times: Fri, Aug 17

A HOTEL site in Lavender, close to key tourist precincts, was launched for sale by public tender yesterday.

The site, which can hold a hotel with about 650 rooms, went on sale after a developer triggered the process by committing to bid at least $148.7 million.

Property consultants said the 0.84 ha site could see a relatively high level of interest from developers given its good location and the healthy hotel sector here.

The 99-year-leasehold land parcel was first made available for sale through the Government Land Sales' Reserve list in 2007.

But the Urban Redevelopment Authority (URA) received an application to put the site to public tender only recently.

Either a hotel or a commercial and residential development can be built there, although the latter must devote at least 30 per cent of the total gross floor area for hotel rooms and hotel-related uses, URA said. The building must adhere to a maximum height of four and 30 storeys for different sections.

In a news release yesterday, the URA noted that the plot is near the historic districts of Kampong Glam and Little India.

Mr Nicholas Mak, SLP International's head of research, expects a top bid of between $850 and $930 per sq ft per plot ratio, which works out to between $283 million and $310 million in total.

Between five and 10 bidders can be expected, experts said.

Mr Mak noted that no hotel sites had been released under the confirmed list of the GLS programme this year, which could make this one more attractive to developers.

But its triangular shape may pose some challenges when it comes to designing the building.

The site could be of interest to developers because the hotel sector is still "very hot", said Mr Alan Cheong, Savills Singapore's head of research.

Hotel occupancy rate percentages are "still in the high 80s", he said, adding: "It pays to develop a hotel now because the cost per room will be cheaper than buying a hotel off the market."

A three- or four-star hotel in that area is still very viable he said. The tender for the site closes on Oct 11 at noon.

  
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