Paramount Hotel site being sold for $200m

Paramount Hotel and Paramount Shopping Centre are up for sale at an indicative price of $200 million through a public tender exercise.

The property has a combined land area of about 102,710 square feet and a plot ratio of 3.0 with a maximum gross floor area of 308,130 sq ft. At the indicative asking price, this works out to about $650 per square foot per plot ratio.

The site is being marketed by Cushman & Wakefield, whose managing director Donald Han said it can be developed into a retail and hotel development with 450-600 rooms.

Perhaps even more attractive to potential developers is the fact that the site is under the government’s ’safeguard list’. This means there is a possibility of converting the site to residential development instead.

Indeed, Mr Han believes that based on current prices for new property launches in the East Coast area, this could prove to be the better option. ‘Prices for recent residential projects like CapitaLand’s The Seafront on Meyer and GuocoLand’s The View @ Meyer transacted between $1,500 and $1,800 psf, reflecting a new high in the Katong, Meyer and Amber Road residential enclave,’ he said.

Based on the possible redevelopment of the site into a condominium with a plot ratio of about 2.1, Mr Han estimates that a developer might pay $830 psf per plot ratio for the site. ‘The breakeven cost could be around $1,100 psf,’ he added.

There is also potential for a hotel development. ‘The property is situated next to Grand Mercure Roxy Hotel, which is operated by the Accor Group. Accor recently announced that they will be relocating their Asian headquarters from Sydney to Singapore to take advantage of the growing tourism market in Singapore and in the region,’ noted Mr Han.

Source: The Business Times, 24 May 2007