TWO more hotel sites have been put on the market – a 99-year leasehold plot in Race Course Road, offered by the Urban Redevelopment Authority, and a freehold plot in Bencoolen Street now occupied by Peony Mansion.
Peony Mansion’s owners want $50 million, which works out to about $850 per square foot of potential gross floor area including an estimated $2.65 million payable to the state for two smallish plots – one is a road ingress and the other houses an electrical substation – behind Peony Mansion.
The two plots total 2,760 square feet, while Peony Mansion runs to 11,964 sq ft. Peony Mansion comprises 33 apartments and two shop units.
Approval for a collective sale has been secured from owners controlling at least 80 per cent of share values – under the old en bloc rules.
Under Master Plan 2003, Peony Mansion is zoned for hotel use with a 4.2 plot ratio – the ratio of maximum potential gross floor area to land area.
Peony Mansion and the adjoining state sites can be redeveloped into a boutique hotel with about 200 rooms, assuming there are no food and beverage outlets. Peony Mansion will be marketed through a tender that closes on April 4.
Over in the Little India area, URA has launched the tender for a 0.9 hectare plot above Little India MRT station.
Jones Lang LaSalle regional director and head of investments Lui Seng Fatt says that assuming the plot is developed into a hotel of up to four-star standard and with about 500 rooms, the completed property would be worth about $600,000 a room or a total of $300 million.
Assuming construction costs of about $500 psf of gross floor area, the site’s land value works out to about $135 million or $400 psf per plot ratio (psf ppr).
However, CB Richard Ellis executive director Li Hiaw Ho reckons that top bids for the site will come in higher – around $600-700 psf ppr – given the plot’s location above an MRT station.
‘The plot can be developed into a four-star property. Bidders are also likely to include some retail/food & beverage facilities.’
The plot has a 3.5 plot ratio, resulting in a maximum gross floor area of 338,417 sq ft.
The tender for the confirmed list site closes on May 21.
Source: Business Times 28 Feb 08