Businessman Chng Gim Huat of CGH Group has emerged as the top bidder for a hotel site near Amara Hotel, with an offer worth $97.07 million.

Businessman Chng Gim Huat of CGH Group has emerged as the top bidder for a hotel site near Amara Hotel, with an offer worth $97.07 million.

The group plans to invest a further $70 million-plus developing the 99-year leasehold plot into a 270-room, three-to-four-star business hotel. That brings the all-in investment to about $620,000 per room.

‘Assuming an average room rate of about $168 per night currently, the hotel’s occupancy will have to be above 70 per cent before we can break even. But we expect room rates to be at least 20 per cent higher when the hotel is completed, most likely within three years,’ said CGH Group director Benjamin Chng.

The state tender drew only one other bidder - from Hiap Hoe Superbowl JV Pte Ltd, which offered $78.8 million for the site.

The reserve-list site was triggered for release with an undertaking by a developer to bid at least $60.888 million. Mr Chng’s bid at yesterday’s state tender reflects a unit land price of $562 psf of potential gross floor area, which is $11 psf per plot ratio lower than the $573 psf ppr fetched for another nearby hotel plot, awarded to Carlton Properties earlier this year.

The lower bid in yesterday’s tender could be due to the fact that the latest site has a lower plot ratio, and hence smaller maximum gross floor area compared with the earlier plot, CB Richard Ellis executive director Li Hiaw Ho reckons.

Mr Chng told BT yesterday that besides developing the plot into a 270-room hotel, CGH Group also plans to include about 30,000 sq ft net lettable area of commercial space. ‘Some of this will be for the hotel’s use while the rest will be strata titled for possible sale, or we may just keep it for investment,’ Mr Chng said.

CGH Group also owns Orchard Grand Court at Killiney Road, comprising more than 200 ‘hotel-style’ service apartments. It still owns about 600,000 sq ft of ramp-up factory space at Paya Ubi Industrial Park which it developed. This comprises about 40 per cent of the original development. The other 60 per cent has been sold. Of the 600,000 sq ft CGH Group still owns, 80 per cent has been let.

In the residential sector, the group recently completed the 44-unit condo Dengfu Ville in Kampong Eunos, which was fully sold earlier this year.

In August/September, it is planning to launch Esta Ruby, which has 72 apartments housed in a 19-storey twin tower development, with a rooftop pool. The project also includes ground floor shop units and a basement carpark.

Mr Chng controls 51 per cent of Compact Metal Industries.

Source: The Business Times, 04 July 2007