(SINGAPORE) Small is hip in today’s hospitality industry, and two more boutique hotels are coming up to capture tourists’ attention – and wallets.

The 40-room Santa Grand Hotel Chinatown, located on the third floor of a shophouse at 20 Trengganu Street, had its soft opening just last month.

‘We just started, so the occupancy rate right now is about 40 per cent,’ said Alan Lim, general manager of the Santa Grand group of hotels. ‘We anticipate that through September, a big month for Singapore tourism with the Formula One race and so on, the number could go up to around 85 per cent.’

The shophouse belongs to Royal Brothers, which obtained regulatory approval to convert the third floor and attic to a hotel in December last year. There are retail shops on the ground floor and Yum Cha Restaurant takes up the second floor.

According to Mr Lim, Royal Brothers was searching for an operator for the hotel, and Santa Grand was on the lookout for opportunities, so the partnership ‘kicked off very quickly’.

The Chinatown hotel fits in with Santa Grand’s expansion strategy, given that the group already has hotels in other cultural districts such as Little India and Bugis, Mr Lim added. Another Santa Grand hotel at East Coast will be coming up.

Room rates at Santa Grand Hotel Chinatown range from $250 to $400 per night.

Another boutique establishment, the 86-room Hotel Fort Canning (Hfc), will open next month. It occupies a colonial building that was previously home to The Legends Fort Canning Park town club.

The company behind the club, The Legends Fort Canning Park Pte Ltd, spent $70 million to develop the hotel and engaged DP Architects to restore the building.

The firm will manage Hfc and is targeting an occupancy rate of 80-85 per cent by mid-2011. The hotel is offering special opening rates from $275++ for a deluxe room until the end of the year. Thereafter, rates will start from $320++ for a deluxe room.

Source: Business Times, 13 Sep 2010

It draws 13 bids, with top offer $813 psf ppr possibly a record for hotel land

A HOTEL site at the junction of Clemenceau Avenue and Havelock Road has proved to be a top draw. It attracted 13 bids and a top offer of $101.1 million or $813 per square foot per plot ratio (psf ppr) – almost double what analysts had tipped just two months ago.

The highest bid came from a group of companies including RB Capital, which is owned by Kishin Hiranandani, a nephew of Asok Kumar Hiranandani of the Royal Brothers Group.

When the 99-year leasehold site next to Central Mall was released for sale in June, property analysts said that it could fetch $378-500 psf ppr. They had expected just a handful of bidders.

Instead, the site drew plenty of offers – and from familiar names such as Far East Organization, Ong Beng Seng’s Hotel Properties Ltd (HPL), Fragrance Group and CapitaLand’s serviced residence unit Ascott.

Far East Organization put in the second-highest bid of $96 million or $772 psf ppr. RB Capital’s bid was just 5 per cent higher.

Asok Kumar Hiranandani and his son Bobby put in the third-highest bid of $85.8 million or $690 psf ppr – in what one market watcher termed as ‘friendly family competition’.

The top bid was about twice as much as the lowest bid, which was $50.1 million or $402 psf ppr from Hoi Hup Realty.

And the price tag of $813 psf ppr could be a new record for hotel land in Singapore, said Cushman & Wakefield managing director Donald Han.

Analysts attribute the strong interest in the tender to growing demand for hotel rooms, as the number of visitor arrivals to Singapore climbs.

‘In the hotel sector, the average occupancy rate gained 10.2 percentage points year on year to 90 per cent in July,’ said Li Hiaw Ho, executive director of CBRE Research. ‘Likewise, the average room rate grew 19.9 per cent year on year to $209 in July. In the light of the growing number of tourists and demand for hotel rooms, other sites presently on the reserve list should be triggered before the end of the year.’

The top bid of $813 psf ppr is much higher than the price paid for two nearby sites sold under the government’s land sales programme in 2006.

The site on which Park Hotel Clarke Quay stands was awarded for $466 psf ppr, while the plot for Studio M was transacted at $518 psf ppr.

The latest site has a maximum gross floor area of 124,400 square feet. An estimated 195 rooms can be developed on the plot.

Source: Business Times, 1 Sep 2010

MAJOR hotel players were among 13 bidders yesterday for a hotel site at the junction of Clemenceau Avenue and Havelock Road.

The highest offer of $101.11 million was lodged by RB Capital Hotels, which is controlled by a nephew of Royal Brothers Group’s Asok Kumar Hiranandani.

It pipped bids from established hoteliers such as The Ascott Holdings, Millennium & Copthorne Hotels and Fragrance Group.

The top tender price works out to about $813 per sq ft (psf) of gross floor area, according to a statement by the Urban Redevelopment Authority.

This is significantly more than the $40.9 million initial bid that triggered the tender for the site, and almost double what analysts had initially expected for the 99-year leasehold land.

Sited next to Central Mall and Merchant Square, the parcel is about 5,500 sq m and can be built up to seven storeys and 11,555 sq m in gross floor area.

Singapore’s booming tourism sector is the reason for the enthusiastic response to the site, property consultants said yesterday.

‘We expected quite a good number of bids, because the hospitality sector is definitely one of the hot areas that developers are looking at now,’ said DTZ’s head of South-east Asia research, Ms Chua Chor Hoon.

‘In fact, we see tourist arrivals hitting a new record high every month, room rates are going up and the integrated resorts are giving Singapore quite a buzz.’

Almost 1.1 million tourists visited Singapore in July, exceeding the one million mark for the first time and extending the streak of record visitor arrivals to its eighth month.

The first seven months saw about 6.7 million tourists and the Singapore Tourism Board is confident that its target of enticing 11.5 million to 12.5 million tourists to visit this year will be met.

In the hotel sector, the average occupancy rate hit 90 per cent in July, up from 80 per cent a year ago, said CBRE Research executive director Li Hiaw Ho.

Likewise, the average room rate increased to $209 in July, a rise of 19.9 per cent compared with the same month the previous year, he added.

‘In the light of the growing number of tourists and demand for hotel rooms, other sites on the reserve list should be triggered before the end of the year,’ he said.

Mr Li also noted that the site on offer yesterday fetched a much higher price than two nearby ones that were sold in 2006. The site on which Park Hotel Clarke Quay now stands was awarded for $466 psf of gross floor area, while the plot for Studio M transacted at $518 psf.

The Clemenceau Avenue site ‘is well-located with entertainment hubs like Boat Quay and Clarke Quay in close proximity’, Mr Li said.

‘In addition, the CBD, Orchard Road and the Marina Bay Sands are also short drives away. The area is growing into an established hotel location with nearby hotels like Studio M, Park Hotel Clarke Quay, Gallery Hotel, Novotel Clarke Quay and Park Regis Hotel.’

Source: Straits Times, 1 Sep 2010

IBIS Singapore on Bencoolen, a three-star hotel, has been sold just 18 months after it opened its doors.

Details were not disclosed but it is understood a Singapore private investor paid a figure above $200 million for it.

The hotel was put up for sale via a private tender in June by joint owners LaSalle Investment Management and French hotel group Accor.

They announced the sale yesterday, but did not disclose the price or purchaser ‘due to confidentiality obligations’.

It is the largest Ibis outside Europe, with 538 rooms, two retail outlets, 68 parking spaces, and two food and beverage outlets. The hotel will continue to be managed by Accor under a long-term management contract for its economy brand Ibis.

LaSalle’s international director, Mr Andrew Heithersay, said the hotel’s occupancy rate is in the ‘mid 90 per cent range’ and the average room rate is about $140.

An industry expert, Mr David Ling, HVS Asia Pacific managing director, said: ‘The room rate is higher than that for the usual economy hotels here. It is the first economy hotel of international standard here and has a contemporary design, so the transacted price would reflect the stronger income position. Generally, international-grade hotels here are expected to trade at a 6 per cent to 7 per cent yield,’ he said.

The hotel sale was brokered by Jones Lang LaSalle Hotels. Its managing director of investment sales in Asia, Mr Michael Batchelor, said he could not disclose the buyer’s identity but that there was interest not only from Singapore investors but also from groups in Indonesia, Malaysia, Hong Kong and Thailand.

‘In 2009, many industry observers felt the market was going to go though a challenging period with the large amount of supply and dwindling arrivals,’ he said. ‘The complete opposite has happened 12 months on… Singapore is now one of the strongest markets in Asia.’

He said most hotels here are running at 90 per cent occupancy even after 6,000 rooms were added in the past year.

‘Around the region, we are seeing a renewed interest in hotels… With hotel profitability returning, hotel values are expected to rise in the future.’

The hotel was 70 per cent-owned by LaSalle via its LaSalle Asia Opportunity Fund II and 30 per cent by Accor.

Source: Straits Times, 3 Aug 2010

A subsidiary of Grand Line Int’l has paid over $200m for hotel: sources

(SINGAPORE) Ibis Singapore on Bencoolen, a three-star hotel that opened last year, has been sold for more than $200 million to a Singaporean buyer.

Hospitality group Accor and real estate investor LaSalle Investment Management said in a statement yesterday that they have sold the 538-room hotel. The partners did not disclose the sale price or the identity of the purchaser due to confidentiality obligations.

But sources told BT that a subsidiary of Singapore-based Grand Line International has paid more than $200 million for the property.

According to past reports, Accor and LaSalle put in $145 million to develop the hotel at Bencoolen Street after winning the tender for the site in 2006 in a 30:70 venture. The hotel opened in February 2009.

Accor, which owns the Ibis brand, will continue to manage the hotel under a long-term management contract.

‘The sale of the hotel is in line with Accor’s ‘asset right’ strategy where the value of the property is being realised with Accor continuing to manage the hotel with the Ibis brand, under a long-term management contract,’ said Michael Issenberg, chairman and chief operating officer of Accor Asia Pacific.

Accor and LaSalle put up Ibis Singapore for sale through a private tender that began in May. The owners decided to formally offer the hotel for sale after receiving a number of unsolicited offers from investors.

Ibis Singapore now enjoys occupancies in the mid-90 per cent range and an average room rate of about $140, LaSalle said. In addition to the comprising 538 guest rooms, the property also has two retail outlets, two food and beverage outlets and 68 carpark lots.

‘Singapore lacked quality inventory of economy hotel rooms, despite strong inbound demand from value-conscious travellers in Asia. Although around 80 per cent of travellers fly economy class, some 90 per cent of hotels rooms in Singapore were business or first class, so there was a clear market mismatch which we capitalised on,’ said Andrew Heithersay, international director at LaSalle Investment Management.

Ibis Singapore is Grand Line International’s first hotel asset in Singapore. BT understands that the company, which used to be in the shipping business, owns some properties in Australia.

Source: Business Times, 3 Aug 2010

Group to expand its portfolio by over 50% in next five yrs

CAPITALAND’S service residence arm, The Ascott Limited, is expanding its portfolio by more than 50 per cent in the next five years.

The division hopes to contribute more significantly to CapitaLand as it grows – perhaps accounting for as much as 20 per cent of group earnings in future.

Ascott chief executive Lim Ming Yan shared these plans for ‘transformational change’ with the media, in conjunction with the launch of the group’s project – Ascott Huai Hai Road Shanghai. The 278-unit property near the Xintiandi entertainment district is owned by Hong Kong-listed real estate group Lai Fung Holdings.

Ascott now has some 26,000 service residence apartments in its portfolio and it aims to raise this number to 40,000 by 2015.

The target is achievable looking at Ascott’s rate of growth, Mr Lim said. This year, the firm will be rolling out about 3,100 apartments. Of these, some 1,600 units across seven properties will be ready in the second half, in countries such as China and Indonesia.

Much of the envisioned growth will come from China. Ascott has just won contracts to manage four Ascott-branded properties in Ningbo, Hangzhou, Suzhou and Guangzhou. The biggest among these will be Ascott Guangzhou IFC, with 314 units, due to open next year.

South-east Asia is likely to be the next fastest growing market for Ascott. For instance, Mr Lim is positive about Singapore’s service apartment sector as the country develops as a regional business centre.

Occupancy rates for Ascott’s properties in Singapore exceed 90 per cent, and ‘we are constantly on the lookout for new opportunities’, he said.

India and Europe are also on Ascott’s radar. It could enter Italy, Switzerland, Turkey and the east European countries.

While merely taking on more management contracts is a fast way to grow, Ascott will continue to focus more on buying and running properties.

It owns and manages about 67 per cent of its portfolio, and is prepared to invest in key gateway cities, Mr Lim said.

Ascott could obtain capital for growth from private equity funds, such as the Ascott China Fund. It could also sell assets to Ascott Residence Trust for funds to re-invest.

Mr Lim did not say how much the entire portfolio expansion would cost.

But he disclosed that Ascott will invest $50 million to refurbish more than 10 of its properties in Asia and Europe over the next 12 months. This is on top of around $20 million it has put in to renovate some properties such as Somerset Liang Court.

As Ascott grows, it ‘can and should be a significant part of CapitaLand’, Mr Lim said. On average, it has accounted for some 10 per cent of the group’s earnings in the last few years, but it would be possible and ‘more meaningful’ to raise this to up to 20 per cent, he added.

Source: Business Times, 2 Aug 2010

Pacifica Partners may gain up to 36% stake in fund set up by Accor and InterGlobe

(SINGAPORE) Pacifica Partners, a hotel investment firm linked to the Government of Singapore Investment Corp (GIC), will buy a stake in a hotel fund with assets valued at US$325 million.

Pacifica Partners’ equity interest could go up to 36 per cent, subject to regulatory approvals.

The hotel fund is being set up by hospitality group Accor and travel corporation InterGlobe Enterprises, each of which will hold a 32 per cent equity stake. The fund’s portfolio will comprise seven hotels with a total of 1,750 rooms in the Indian cities of Delhi, Bangalore and Chennai. These are at various stages of construction and will open their doors from next year to 2013.

Accor will manage the hotels under its brands. They include Novotel Delhi International Airport (400 rooms), Pullman Delhi International Airport (270 rooms), Novotel Bangalore Outer Ring Road (220 rooms) and Ibis Bangalore Outer Ring Road (330 rooms). The fund may acquire more assets down the track, and will focus on the upper mid-end and high-end hotel segments.

‘The investment of Pacifica in this fund provides a platform for further growth in the strategic market of India where Accor and InterGlobe have already created an extensive development pipeline,’ said Accor chairman and CEO Gilles Pelisson.

Accor, joining hands with InterGlobe, has been in India for five years and has opened eight hotels. Another 43 will be coming up in the country.

‘India, at this time, is one of the most attractive lodging growth opportunities in the world,’ said Pacifica Partners managing director Peter Meyer. The firm ‘views this fund as an excellent vehicle to take advantage of this compelling market by teaming up with Accor and InterGlobe’.

Pacifica Partners is a joint venture between GIC and Host Hotels & Resorts. The latter owns luxury and high-end hotels worldwide, under brands such as Marriott and Ritz-Carlton, and is listed on the New York Stock Exchange.

The tie-up will seek investments in the Asia-Pacific, either existing hotels and resorts, or development projects

Source: Business Times, 22 Jul 2010

W Hotels Worldwide and Indonesian company Dua Cahaya Anugrah (DCA) launched The Residences at W Bali-Seminyak yesterday at St Regis Hotel Singapore.

The 79-unit villa-style development is next to the 158-room W Bali Hotel.

The 79 units consist of 65 one-bedroom units of 2,422 to 3,068 sq ft, 10 two-bedroom units of 3,789 sq ft and four three-bedroom villas of 6,708 to 7,669 sq ft.

Prices range between US$605 and US$800 per sq ft – which equates to about US$1.5 million for the most affordable villa.

According to a DCA spokesperson, this is about a 5 to 10 per cent premium to other projects around Seminyak.

The development is freehold for Indonesian citizens and leasehold for foreigners, based on the current ownership laws in Indonesia. DCA lawyers are available to advise foreigners on the types of ownership available to foreigners.

The project, which was launched in Indonesia about three months ago, is almost 60 per cent sold. Most of the buyers are the Indonesians. Reportedly, three one-bedroom villas have already been sold to Singaporeans.

A catch is the concept of ownership – the villas will form part of W Hotel’s rental pool and will be looked after by the hotel’s management team for 48 weeks of the year. The villa owners will be allocated exclusive access to their property for four weeks a year.

At a news conference yesterday, DCA said owners can expect an internal rate of return in excess of 5 per cent from their property’s rental income.

The development was designed by SCDA Architects, which has done numerous high-end developments in Singapore.

There will be a public viewing at St Regis Hotel over the weekend, from 10am to 7pm.

W Hotel Worldwide is a brand in the Starwood stable, which includes St Regis, Sheraton, Le Meridien and Westin.

The brand was started in 1998 with the opening of W New York. Since then it has expanded rapidly. Currently, Starwood is the only hotel chain with a dedicated ‘residential’ team that helps developers with projects.

In Singapore, City Developments has launched W Residences on Sentosa. In May, two units were sold at a median price of $2,800 psf.

Source: Business Times, 17 Jul 2010

Other projects include Hong Leong’s launch of The Scala in Serangoon

A NEW development is about to inject some freshness to the historic area of Chinatown. The Tang Group of Companies will be building Dorsett Regency Hotel and Dorsett Residences at a 99-year hotel site at New Bridge Road.

Agents have started gathering interest for the 68-unit Dorsett Residences, and they say it could be previewed at the end of this month. The six-storey project will have one, two and two-plus-one bedroom units, starting from 484 sq ft in size. Prices are said to be in the region of $1,700-$1,900 psf.

According to agents, residents will be able to tap on concierge services from Dorsett Regency Hotel next door.

Tang Group’s website provides more details. It says the 10-storey hotel will have 285 rooms, a swimming pool and a landscape deck. The entire hotel-residential development will have a direct link to Outram Park MRT station.

Tang Group is headed by Dennis Chiu, of the Chiu family that used to run the former Tang Dynasty City in Jurong.

The firm bagged the hotel site through a state tender which closed in September last year. Zoning guidelines allow developers to set aside as much as 40 per cent of a hotel site’s total floor area for commercial and residential uses.

Cushman & Wakefield managing director Donald Han believes that Dorsett Residences should be popular, given its location. He suggests that medical tourists who frequent Singapore General Hospital nearby may consider buying units for their own occupation when they are in town.

He adds that for developers, hotels are a longer term investment compared with homes. Developers would be able to recover some capital more quickly by incorporating and selling residences in hotel sites.

Another residential project that is coming up is The Scala. Hong Leong Holdings plans to launch the 99-year leasehold 468-unit development at Serangoon Avenue 3 at the end of the month.

There will be one to four-bedders, ranging from 474 to 2142 sq ft in size. Hong Leong has yet to determine the number of units and prices for the launch. Based on caveats lodged, units at Chiltern Park nearby were sold at $735-761 psf in May.

‘The Scala was designed with the family in mind,’ said Hong Leong’s sales and marketing head Betsy Chng. The project will have seven pavillions, providing facilities such as a wood-fired pizza oven for residents.

Over at Cairnhill Road, private previews of CapitaLand’s Urban Resort Condominium have started since May. According to Urban Redevelopment Authority data, 12 units have been sold. Of these, four units changed hands in June at a median price of $2,733 psf.

Source: Business Times, 17 Jul 2010

Plans for former Specialists’ Shopping Centre and Hotel Phoenix site include 500 hotel rooms, 224,000 sq ft of retail space

A NEW shopping and hotel destination is set to take the Orchard shopping belt by storm in 2013. On offer are 500 hotel rooms and about 224,000 sq ft of retail space, as well as two open plazas for busking and artist performances.

This is the plan unveiled by United Engineers Ltd during the groundbreaking ceremony yesterday for the site that previously housed the Specialists’ Shopping Centre and Hotel Phoenix complex – which has a gross floor area (GFA) of 538,196 sq ft. The development is designed by internationally-renowned architectural firm Tange Associates.

The property group was appointed by OCBC to build the shopping cum hotel destination in June through an arrangement that allows OCBC to retain ownership of the prime Orchard Road property after the redevelopment is complete.

Directly opposite this refurbished shopping and lifestyle destination is the 218 Orchard Road site (previously the home of Orchard Emerald). Like its sister sitting on the other side of the road, the site, which occupies a GFA of 104,410 sq ft, will be developed into an 11-storey building with two basement floors. About 37,674 sq ft of space will be devoted to offices, while 29,063 sq ft will be retail space. The site will be developed by OCBC’s insurance subsidiary Great Eastern Life, and UEL will act as project manager.

To provide a seamless way for pedestrians to make their way to and from the two destinations and to the Somerset train station, a glass pedestrian bridge linking the development to the property sitting opposite – formerly Orchard Emerald – is also in the works by UEL. It will also be constructing an underpass that will help to link the hotel cum retail property to the Orchard Emerald site. The redevelopment of the Specialists’ Shopping Centre site, along with the construction of the glass bridge and underpass, is slated for completion in the second quarter of 2013.

OCBC said that the total development costs for both properties is about $700 million, with about $150 million to be spent on the old Orchard Emerald site.

Said Jackson Yap, group managing director and chief executive of UEL on the former Specialists’ Centre development: ‘Its unique architecture that straddles both sides of Orchard Road, and with the glass overhead bridge, will offer a new postcard view of Orchard Road.

‘With the glass overhead bridge, the Orchard Road Christmas Light-up will also have new decorative possibilities. We strive to create a new focal point in Orchard Road that will be buzzing with activity and excitement.’

Source: Business Times, 17 Jul 2010