Sale of Kallang River hotel plot delayed

Source : Business Times - 19 Dec 2008

URA says release of the site will be deferred to June 2009

THE Urban Redevelopment Authority (URA) has deferred the release of a hotel site along Kallang River from this month to June 2009. The site was originally due to be made available for December 2008, as part of the government’s plans to transform the Kallang Riverside into a waterfront lifestyle precinct by the edge of the city.

‘URA is currently working with other agencies to finalise the detailed planning and development conditions of the Kallang River site to relate to the broader plans for Kallang Riverside and, as more time is needed, the release of this site at Kallang River on the reserve list will be deferred to June 2009,’ the agency said yesterday.

The deferment ‘makes sense’ as the site is unlikely to be triggered in the current market conditions even if it is made available, market watchers said.

URA also announced yesterday that a commercial site at the corner of Stamford Road and North Bridge Road is now open for application under the reserve list system.

The site contains three historical buildings - Capitol Theatre, Capitol Building and Stamford House - that are to be retained and restored for use. The Capitol Theatre, for one, is required to be restored into an arts or entertainment-related performance venue, said URA.

And to strengthen the hotel cluster in the area, the developer of the site will be required to develop a minimum of 40 per cent of the total gross floor area (GFA) for hotel use as well.

Analysts said that the site is unlikely to see interest anytime soon. ‘This is an irreplaceable site in terms of its location and heritage value but the timing may be inappropriate to realise its full potential,’ said Ku Swee Yong, director of marketing and business development at Savills Singapore.

‘I don’t think the site will be triggered in the next six months,’ said Nicholas Mak, director of research and consultancy at Knight Frank.

Other than the poor economic outlook, potential bidders are also likely to be deterred by a few other factors, he said. For one, the conservation element might put off some developers. Others are likely to be deterred by the fact that some of the GFA has to be devoted to hotel use.

Developers are also not too keen on the ‘two envelope’ system, under which the site is being sold, Mr Mak said. Under such a system, the government first picks out developers whose concepts gel with its vision, then awards the site to the highest bidder.

Analysts also expressed concern that if the government keeps releasing sites on the reserve list, there could soon be too many sites on the list.