Fragrance is top bidder

Source : Straits Times - 29 Aug 2008

THE Fragrance Group, a hotel and property developer, has submitted a whopper bid in a tender for the use of two blocks at the old Changi military camp.

Its Fragrance Hotel Management has offered a monthly rent of $125,000, or $24.52 per sq m (psm), for the vacant state properties, which it plans to develop into a hotel.

The bid is miles ahead of the $28,500-a-month guide rent set by the Singapore Land Authority (SLA), which is effectively the landlord.

Fragrance’s offer is also twice as much as the next bid - $61,000 a month, or $11.97 psm - lodged by Forward Alliance, which is primarily in the general wholesale trade.

Orientus (Asia) Holdings, a new entrant in the property development sector, was next with a $52,000-a-month offer.

Two other bids came in at just $15,099 and $13,000 a month.

It is understood that the keen response will prompt the SLA to release the other four blocks at the Hendon Road camp for interim use, possibly also as hotels.

It earlier said it would consider leasing out the other blocks.

The lease for the first two blocks and a covered shed is for an initial term of three years, renewable up to 2018. The properties sit on 9,666 sq m of land, nearly twice as large as a football field.

The dilapidated three-storey buildings have a gross floor area of 5,097 sq m.

The SLA has said a hotel will help transform Changi Point into a homely, seaside destination with lots to do.

Property consultants believe a hotel on the site, likely at the mid-tier level, is appropriate, given Changi’s charm.

Knight Frank’s director of research and consultancy, Mr Nicholas Mak, says such a hotel will need a unique concept to differentiate it from nearby competitors.

Fragrance Hotel directors could not be reached for comment.

The firm is part of the listed Fragrance Group and is known for its budget hotels. It now has 18 no-frills outlets in Singapore, including those in Geylang and Balestier.

Fragrance Group chief executive Koh Wee Meng, 45, recently made headlines with his debut at No. 24 on Forbes magazine’s list of the 40 richest Singaporeans. He has a net worth of $230 million.

The SLA will spend the next two to three months evaluating the bidders.

‘Among other factors, the SLA would consider the best value for the state based on allowable uses and, in this case, hotel, business concept, track record and the financial health of the company,’ it said yesterday.