Govt releases first hotel site for tender this year
A NEW hotel behind Novena Square is on the cards after the Government made available for tender the first hotel site this year.
Consultants envisage a four-star hotel with up to 400 rooms on the site at Sinaran Drive.
As the site is on a reserve list, the tender will not commence until a developer agrees to bid a minimum price that has been determined.
But market watchers expect keen interest in view of the recent pick-up in the hotel sector.
Located near two hospitals, the site is likely to appeal to hoteliers who also want to cater to health tourists, they said.
This 99-year leasehold site is one of three sites planned for release under the Government’s land sales programme for the first half of this year.
The other two are in backpacker haunt Bencoolen Street, and Clemenceau Ave/Unity Street.
The 5,788.8 sq m site has a gross plot ratio of 4.2, allowing it to generate a maximum gross floor area of about 24,313 sq m or 261,703 sq ft.
Property consultancy Knight Frank’s director of consultancy & research, Mr Nicholas Mak, expects a four-star hotel with 290 to 350 rooms on the site.
The site, he said, could attract bids of between $39 million and $55 million when up for tender.
Hospitality consultants HVS International’s managing director, Mr David Ling, said the site could accommodate a four-star hotel with about 300 to 400 rooms, and cost around $35 million to $45 million. There should be no lack of takers, he said.
‘The investment climate is good. Room rates have gone up by 15 to 20 per cent last year and we are expecting double-digit growth this year,’ said Mr Ling.
Occupancy has also strengthened, with four-star hotel occupancy at 85 per cent last year, up from the mid-70s in 2004, he said.
Four-star hotel room rates rose 11 per cent to an average $129 last year, he added.
‘We expect a surge in demand for the three- to four-star hotel market. The growth is in the regional tourist market, from China and India particularly,’ he said. ‘They tend to spend more on shopping than on accommodation. ‘
Source : Straits Times - 26 Apr 2006
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