Tanjong Pagar reserve hotel site attracts $61m bid

A committed bid of $60.888 million has been received for a hotel site on the Government Land Sales (GLS) reserve list at Tanjong Pagar Road/Tras Street. The site will now be put up for public tender in about two weeks’ time.

Based on the committed bid price, the 30,844 sq ft site, which has a plot ratio of 5.6 and a maximum gross floor area (GFA) of 172,728 sq ft, works out to cost $352.5 per square foot per plot ratio (psf ppr).

Knight Frank head of research Nicholas Mak believes that the site could eventually fetch around $500 psf ppr.

The site is close to the Tanjong Pagar MRT station as well as office buildings like Capital Tower, Temasek Tower and Springleaf Tower. ‘A new hotel here will probably cater to cost-conscious business travellers and mid-tier tourists,’ Mr Mak said. The hotel could also be positioned as a four-star hotel with about 300 rooms.

Mr Mak said that the committed bid price appeared to be in line with those for other sites that have been put up for public tender recently. This is the second hotel site on the reserve list to be put up for tender this year. The first was in Tanjong Pagar Road/Gopeng Street last month, when the trigger price was $370 psf ppr.

In the West Coast, the Urban Redevelopment Authority has put a residential site at West Coast Crescent on the GLS reserve list.

The 129,166.8 sq ft site has a plot ratio of 2.8 and a maximum GFA of 361,667 sq ft. URA estimates that a development with 290 units can be built.

Colliers International director for investment sales Ho Eng Joo reckons the site could receive bids of $260 to $290 psf ppr. The break-even cost for the new development is likely to be around $600-$630 psf, depending on the cost of materials, he said.

The West Coast, particularly areas close to educational institutions like the National University of Singapore, has seen an influx of developments including Varsity Park and more recently Carabelle. Blue Horizon, which is next to the new site and was launched several years ago, is now selling for over $600 psf on the secondary market.

Source: The Business Times, 27 April 2007