COMMERCIAL MARKET
Lavender hotel site open for tender
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.
The top bid is expected to be 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.
Since 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.
Hotel occupancy rate percentages are still in the high 80s, thus adding to the appeal of hotel investment. It also pays to develop a hotel now because the cost per room will be cheaper than buying a hotel off the market.
Source: The Straits Times – 17 August 2012
Marina Bay area looking extraordinary successful
Even in its infancy, Marina Bay, the new growth area slated to be the new extension of the traditional CBD, has achieved much success both in terms of leasing rates and return on investment.
While more than $7.5 billion has been invested in Marina Bay by the government to date, more than $6.2 billion has been received by URA from the sale of land parcels (which so far constitute about 20 per cent of the available stock).
There has also been more than $25 billion of local and foreign equity pumped into developments in the area.
Marina Bay is expected to deliver potentially 30.4 million sq ft of office space when fully developed. In addition to the traditional central business district (CBD), which yields about 21.6 million sq ft of office space, Singapore's office space is expected to more than double to 52 million sq ft over the next 20-25 years.
To date, the six office towers (totalling 5.5 million square feet) in Marina Bay enjoy an average pre-lease commitment level upon completion of 82 per cent.
Taking floor plate size as a benchmark, there are at least 14 office developments in the CBD that can offer floor plates of more than 20,000 sq ft, with three more in the pipeline. These buildings can offer approximately 13.5 million sq ft of large column-free contiguous space. Of these 14 developments, more than half are located in Marina Bay.
The banks were the first to lead the charge into Marina Bay. But the make-up has been changing. The proportion of financial institutions in Marina Bay has shrunk, from 80 to 65 per cent, and the key reason for that is there has been a stronger take-up of late by complementary industries.
Legal firms now account for the second-biggest occupier share at 8 per cent. The information technology sector made up 6 per cent, while commodities and insurance firms both recorded 5 per cent.
That said, the concern over the hollowing out of the traditional CBD with the new buildings at Marina Bay coming on board has not come to pass, said Mr Armstrong.
The emergence of the new buildings in Marina Bay has upped the ante in terms of building specifications particularly for older buildings in the traditional CBD area. Several older office developments, including 71 Robinson Road, Ocean Financial Centre, and One Raffles Place Tower 2, have been recently redeveloped.
Interestingly enough, rents in the CBD and Marina Bay are on a par, with Grade A rents averaging $10 psf.
Residential developments in the CBD, too, have expanded. From 2007, the stock has doubled, with 2,360 residential units added to the market. Currently, there are between 3,000 and 3,500 residential apartments in the CBD.
Upcoming projects, including Cecil Suites (272 units), Marina One (1,006 units), and a residential development at what used to be Chow House (128 units), are expected to launch between the second half of this year and 2014.
Source: Business Times – 17 August 2012
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