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Its proposed development is a 350-400 room hotel with retail space

The sizzling hot Singapore hotel market has drawn out listed Hotel Grand Central Ltd (HGC) - which, to date, owns only one hotel here - to emerge as the top bidder for a 99-year leasehold ‘white’ site at Belilios Road in the Little India area with a $48.89 million bid.

Assuming it is awarded the site, the group plans to develop a 350 to 400-room hotel targeted at the ‘mid-market segment of travellers who seek value’, an HGC spokesman told BT yesterday.

The group is also planning to include some retail space for its proposed development, possibly on the ground floor on the side facing Serangoon Road, he added.

He declined to give any estimate for the all-in investment in the project, but said HGC hopes to complete the development around early 2009.

The other four bidders for the site, which was offered under a state tender that closed yesterday were: a Hotel Royal Ltd subsidiary ($43.39 million); Soilbuild Group ($41.86 million); Bishopsgate Developments, part of the BS Capital group ($35.18 million); and Lee Han Boon ($29.9 million).

Assuming the Urban Redevelopment Authority (URA) awards the site to HGC, it will be the group’s first major hotel investment in Singapore in around 30 years. It currently owns just one hotel in Singapore - the namesake Hotel Grand Central at Kramat Lane in the Orchard Road vicinity, behind Le Meridien - which it completed in the early 1970s and expanded in two later phases.

‘Our bid for the Belilios Road site reflects our confidence in the Singapore tourism sector,’ HGC’s spokesman noted.

The group’s proposed hotel at Belilios Road will target primarily Indian travellers but HGC is also gunning for other Asian travellers, including those from Indonesia and the Philippines. Another group will be travellers from Australia, New Zealand and the United Kingdom ‘who wish to sample Indian culture without going to India’.

‘The site is in a really interesting location which will appeal to tourists. Belilios Road was named after a cattle rancher from Calcutta and it is also next to a Hindu temple dedicated to the goddess Kali,’ HGC’s spokesman said. The site can be developed into a project with a maximum gross floor area of 116,282 sq ft. As a ‘white’ site, the possible range of uses allowed for the plot include hotel, retail, dining, entertainment, office and residential, URA had said earlier.

Although mainboard-listed HGC now has just one hotel in Singapore, it has a sizeable chain overseas, comprising more than 20 hotels in Australia, New Zealand and Malaysia, most of which are owned and managed by the group under brand names like Hotel Grand Chancellor and Hotel Grand Continental.

Source : Business Times - 23 May 2007

CITY Developments (CityDev) was yesterday the sole bidder for a 99-year leasehold site slated for development into backroom offices in Tampines.

Its bid price of $225 million works out to $622 per square foot (psf) of potential gross floor area.

While that seems like a viable investment based on current as well as near-term projected office rents amid the shortage of office space, some market watchers wondered if the listed property group could have saved a small bundle by bidding lower, especially as it was the only bidder in the public tender exercise yesterday morning.

Just a day earlier, Urban Redevelopment Authority (URA) had made public the minimum reserve price of $448 psf per plot ratio for a commercial site at Anson Road earmarked for a prime office development.

‘Considering that Anson Road is more prime than Tampines, the government’s minimum price for the Tampines site should be lower,’ a market watcher observed.

While the Anson Road plot is on the reserve list, which means its minimum or reserve price is made public when a developer makes a successful application for its release, the Tampines site offered by Housing & Development Board is on the government’s confirmed list, where minimum prices are not made public.

‘May be they (CityDev) didn’t expect to be the only bidder for Tampines and so may not have stationed people outside the tender room when it opened in the morning to see if there was anyone else who bid,’ reckoned one market watcher.

Another observer, CB Richard Ellis executive director Li Hiaw Ho, was also surprised that the tender attracted only one bid, given the tight supply of office space in the Tampines Regional Centre.

However, another seasoned property player had another explanation: ‘Maybe the other potential bidders read the writing on the wall: that the government may release a lot of office sites in the near future’ to relieve the acute office shortage building up which is threatening to clip Singapore’s competitiveness.

CBRE’s Mr Li estimates that based on CityDev’s bid price, its breakeven cost could be around $1,200-$1,300 psf.

‘Based on current rents of about $5.50 psf a month for prime offices within Tampines Central, (City Dev) could expect a yield of about 4.2 to 4.5 per cent,’ he said.

Another observer estimated a higher breakeven cost of about $1,370 psf but said that assuming rents in the area rise from about $5-$6 psf currently to about $7-$8 psf in about 18 to 24 months when the new project on the latest site could be ready, the net yields could still be pretty decent at about 4.8 per cent to 5.6 per cent.

The 86,109-sq-ft site can be developed into a project with up to 361,656 square feet maximum gross floor area.

This could yield about 300,000 sq ft of lettable office space, according to property consultants.

A CityDev spokeswoman said that the group’s scheme is for mainly office use but it may have some pockets of retail space if appropriate.

Source : Business Times - 16 May 2007

The Urban Redevelopment Authority has received a committed bid of $172 million for a commercial site at Anson Road/Enggor Street and will now put it up for public tender. The 0.37 ha site was only put on the Government Land Sales reserve list in March.

Based on the committed bid, the site - which has a maximum permissible gross floor area of 383,808 sq ft - works out to be about $448 per square per plot ratio (psf ppr).

Most property consultants, however, believe that it will eventually fetch a much higher price.

Savills Singapore director of marketing and business development Ku Swee Yong reckons that bids of between $1,000 and $1,200 psf ppr can be expected. He adds that the relatively low reserve price is common in a rapidly rising property market. ‘The figure could be based on values three-quarters of a year ago,’ he said.

Indeed, so far this year, three office buildings - Temasek Tower, SGX Centre and SIA Building have been sold at benchmark prices, and Mr Ku says the developer for the Anson Road/Enggor Street site can even hope to sell the new building for around $2,000 psf.

And even if the new building is not for sale, a developer would probably achieve good rental returns.

Jones Lang LaSalle regional director and head of investments Lui Seng Fatt believes that if construction is put on a fast track, pre-commitment of leases as early as end-2008 could see rents start at between $8-$9 psf per month. Mr Lui notes that already, new office buildings like 55 Market Street are fully leased. ‘Even at today’s prices, it would not be difficult to get $7 psf,’ he added.

Mr Lui does add that the size of the floor plate will be important with most businesses in the CBD requiring 15,000 sq ft. According to URA, the Anson Road/Enggor Street site can have a floor plate of about 18,000 sq ft. The site has a height limit of around 50 storeys.

Source : Business Times - 15 May 2007

A PLUM commercial site in Tanjong Pagar is to be put on the market soon, after an unnamed developer said it would bid at least $172 million for it.

The 39,826 sq ft site at the junction of Anson Road and Enggor Street will be put up for tender in two weeks’ time, the Urban Redevelopment Authority (URA) said yesterday.

A 50-storey block of offices or shops can be built on the triangular plot, which has a total potential gross floor area of about 383,809 sq ft.

Keen interest is expected for the site, said property consultancy CB Richard Ellis (CBRE).

Mr Li Hiaw Ho, executive director of CBRE Research, said offers are likely to come in at double the $172 million initial bid, based on recent land sales and investment transactions.

The $172 million offer works out to $448 per sq ft per plot ratio (psf ppr), he said. But the site ‘is likely to be awarded at above $900 psf ppr’.

‘In view of the critical shortage of office supply, we would expect good interest in this site,’ Mr Li added.

The 99-year leasehold land parcel was put on the URA’s reserve list in March.

Under this system, the Government will put a site up for public tender if a developer agrees to bid for it at an acceptable minimum price.

Source : Straits Times - 15 May 2007

EUROPEAN hotel company Accor says it will put in a bid for a government land sales hotel site in Tanjong Pagar and will consider bidding for another site nearby.

Accor said it plans to build a 538-room Ibis hotel on the Bencoolen Street site it won in a public tender in December last year together with joint venture partner LaSalle Investment Management.

The Ibis Bencoolen Street

The Ibis Bencoolen Street, in which Accor has a 30 per cent stake, will cost $145 million and will be the largest Ibis hotel in the world outside Paris.

Other Accor hotels in Singapore include Grand Mercure Roxy and Novotel Clarke Quay.

Making the announcement yesterday, Accor Asia Pacific managing director Michael Issenberg said the company had decided to move its Asia Pacific headquarters from Sydney to Singapore.

Saying that Accor has 100 hotels under development or in advanced stages of planning across Asia, Mr Issenberg added that ‘Singapore is the perfect base to build and operate that network’.

Accor’s hotel brands include the deluxe Sofitel, upper-scale Novotel and mid-scale Mercure. Ibis is Accor’s economy hotel brand.

Mr Issenberg said that a flagship Sofitel in Singapore would be ideal, but Accor’s key priority was to be financially prudent.

Accor may expand its time-share Accor Premiere Vacation Club here, and is considering buying properties in Singapore to do this. Mr Issenberg said that Accor has had discussions with developers although nothing has been finalised.

For Accor, economy hotels are viable as the company believes that people in the fastest growing markets such as China and and India are more likely to looking for quality three-star accommodation.

‘There are many hotel projects in the pipeline in Singapore, but of the 7,200 rooms committed, only 10 per cent of this supply is in the economy segment, while 43 per cent is committed to the mid-tier segment and 47 per cent to the upper-tier sector,’ he said.

Mr Issenberg said that when Ibis Bencoolen Street opens in 2009, room rates are expected to be between $100 and $110.

Ibis is Accor’s fastest growing brand in Asia Pacific, with 35 hotels already operating and over 50 under development. In India alone, plans are under way to build up to 20 Ibis hotels in the next five years. Globally, there are 750 Ibis hotels in 38 countries, and the brand is set to grow by up to 50 hotels per year.

Accor also has plans to develop its other brands in Asia. Mr Issenberg said that it will invest US$200 million to do this. Opening in August will be its flagship hotel in China, the Sofitel Wanda Beijing.

Source : Business Times - 11 May 2007