Record top bid for hotel site on Farrer Park MRT station

Business Times: Wed, Apr 18

[SINGAPORE] Kishin RK's RB Capital group has made a record top bid for a 99-year leasehold hotel plot in Little India above the Farrer Park MRT Station. Its bid of $151.005 million or $1,078.81 per square foot per plot ratio (psf ppr) is slightly higher than the $1,072.44 psf ppr that his cousin Bobby Hiranandani paid for the Ogilvy Centre site at Robinson Road in January 2011. However that price was based on a 60-year leasehold tenure for the landmark conservation building opposite Lau Pa Sat which is now being transformed into a Sofitel So hotel. To compare the latest tender result for the Farrer Park site with a vacant 99-year hotel land parcel, some market watchers suggest one could look at the $938.21 psf ppr paid by City Developments for a Robertson Quay plot in March 2011. RB Capital's top bid was also nearly 2.7 times the minimum $56.5 million or $403.65 psf ppr minimum price undertaking given by an unnamed party that successfully applied for the site's release from the government's reserve list. Yesterday's tender drew 10 bids. The top bid was about 7 per cent above the second highest offer of about $1,008 psf ppr from The Ascott Holdings unit Taipan Trustee. The 33,326 sq ft site - at the corner of Rangoon and Farrer Park Station roads - can be developed into a maximum gross floor area (GFA) of nearly 140,000 sq ft, of which at least 60 per cent must be for hotel and hotel-related uses. The balance 40 per cent can be for other complementary uses such as retail, office, medical suites and serviced apartments. "This is one of the very few hotel sites on top of an MRT station," Mr Kishin said last night. "Little India is one of the strongest hotel submarkets in Singapore enjoying very high occupancies, usually above 90 per cent, but there's a dearth of international hotel brands in the vicinity that also have a strong presence in India - where the captive audience for a hotel in this location will come from." RB Capital will negotiate with an operator to manage the proposed Farrer Park hotel. Mr Kishin points to an upward re-pricing of Singapore hotel rooms over the the past year to $800,000 and above per key in the four-star segment and $1 million and above in the five-star category. RB Capital is planning a four-star hotel as well as a retail component for the Farrer Park site but it is still weighing various schemes. "We could have 300 to 500 keys for the hotel, depending on the size of the retail component." However, market watchers suggest medical suites could also surface in the project - given that strata medical suites at the Connexion project across the road have been fetching well above $3,000 psf. Mr Kishin added that the proposed Farrer Park project will contribute to the pipeline of properties for RB Capital's proposed hospitality vehicle which could potentially be listed on the Singapore bourse. In London, RB Capital is said to be one of a couple of parties shortlisted to acquire a portfolio of 42 Marriott hotels in the UK being offered by RBS. RB Capital currently has two other hotels under development - at Clemenceau Avenue in Singapore and another in Kuala Lumpur. Both will be managed by InterContinental Hotels Group under the Holiday Inn Express brand. At yesterday's tender, Mr Kishin's cousin Bobby bid $91.2 million or $651.55 psf ppr through Equal Holding, placing him in eighth position. Other bidders include Roxy-Pacific unit RP Assets, in third place with a bid of about $857 psf ppr. Hotel 81-linked Forward Land was fourth, bidding $814 psf ppr. A unit of Hongkong-based Harilela group cast the fifth highest bid, about $802 psf ppr. The group owns the Holiday Inn at Cavenagh Road. Property and hospitality giant Far East Organization and its listed unit Orchard Parade Holdings bid about $656 psf ppr. The lowest bid of $470.80 psf ppr was from Race Course Development, whose shareholders are Tan Suat Hua and Tan Sek Khee. The former was one of the original shareholders of Singapore Healthpartners Pte Ltd (now known as The Farrer Park Company), the developer of Connexion, which will have a hospital, medical centre and hotel. The group paid about $265.3 million or $430.65 psf ppr for its site in 2007. The plot was sold as a white site (hotel, commercial, residential and hospital use allowed) with at least 40 per cent of the maximum GFA for hotel use. Source: Business Times