Source : Business Times – 3 Jun 2009
THE Urban Redevelopment Authority (URA) yesterday released a hotel site along Kallang River for application through the reserve list.
The first sale site in the new Kallang Riverside growth area comes with a 99-year lease and spans 0.74 hectare. The maximum permissible gross floor area (GFA) is 225,148 sq ft.
URA estimates that the plot can yield 450 hotel rooms and 33,906 sq ft of commercial space, though the actual mix would depend on the developer’s plans.
The development can go up to 16 storeys high and will front Kallang River. It will also be near the upcoming Sports Hub. ‘Its proximity to the Central Business District and waterfront setting makes it ideal for a hotel development that can cater to business travellers and tourists,’ URA said.
Jones Lang LaSalle Hotels executive vice-president Chee Hok Yean noted that the plot may be suitable for an economy hotel. The hotel might cater to a younger crowd, such as sports teams or tourists in town for sporting events, she said.
Knight Frank’s director of research and consultancy Nicholas Mak pointed out that the site has a good river view and may fit a three to three and a half-star hotel.
He estimates that bids may range from $48 million to $58 million, which works out to $215 to $260 per sq ft per plot ratio (psf ppr). In April, a reserve list hotel site in Short Street received a committed bid of $8.8 million, which works out to about $200 psf ppr.
Given the weak market however, Mr Mak noted that the site may not be triggered for launch this year. Hotel developers have already bought many sites in the last few years and several still remain on the reserve list, he said. Kallang in particular, is a relatively ‘unproven market’ for hotels.
Developers interested in the parcel can apply to URA for it to be put up for tender. Because of the site’s prominent location, a URA-chaired design advisory panel will guide the development team with its design.
URA had planned to release the site in December last year but later deferred it to finalise planning and development conditions. With the financial and property sectors faltering then, market watchers had felt that the site would not attract interest even if it was available.
URA also reduced the size of the hotel site last year, after market feedback indicated preference for a smaller development. The plot originally had a site area of 1.59 hectares and a GFA of about 484,376 sq ft.
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