An unnamed developer has entered a bid of $79.4 million for a 0.24 hectare hotel site at the corner of Tanjong Pagar Road and Gopeng Street, triggering a public tender for the site. Market watchers, however, reckon that the plot could fetch around $100 million in the tender.
The site has a plot ratio of 8.4, giving it a maximum potential floor area of 19,900 square metres, which means that the trigger price works out to about $370 per square foot (psf) of gross floor area.
However, a price tag of around $500 psf is achievable, said Jones Lang LaSalle Hotels executive vice-president Chee Hok Yean.
‘Looking at past transactions, bids were all around $500 psf,’ Ms Chee said. ‘The winning bid will probably be about the same.’ At $500 psf, the price for the site works out to $107.3 million.
This site is the first hotel site to be triggered for sale from the reserve list in 2007. Under the government’s reserve list system, a site is only offered for public tender if it receives an application from a developer who commits to bid for the site at a price which is acceptable to the government.
URA has received an application from a developer who has committed to bid a price of at least $79.4 million for the site. The government body said that the identity of the applicant will not be released.
URA will launch the public tender for the site in about two weeks’ time. The launch date will be announced later and about nine weeks will be set aside for the tender.
‘The land parcel is conveniently situated in close proximity to the Tanjong Pagar MRT station, which will provide hotel guests the convenience of travelling to other parts of the city and the rest of the island,’ said URA. ‘Complementary retail, restaurant and entertainment uses within the development will also add to the diversity of amenities and vibrancy of the area.’
Source: The Business Times, 15 March 2007
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