Friday, September 4, 2009

Chiu family is top bidder for New Bridge Road hotel site

Bid by its unit, Leedon Investments, of $67.7m is about $401 psf ppr

THE Chiu family of Hong Kong that used to run the former Tang Dynasty City attraction in Jurong is poised to make a comeback on the Singapore hospitality scene.

A unit linked to the family emerged as top bidder yesterday in a state tender for a 99-year leasehold hotel site at New Bridge Road, near Outram Park MRT Station, Pearl's Centre and Singapore General Hospital (SGH).

The top bid of about $67.7 million works out to almost $401 per sq ft (psf) of potential gross floor area.

Dennis Chiu, a director of Leedon Investments, which placed the highest bid, told BT the group hopes to develop a boutique business hotel with about 300-400 rooms.

The development cost could be in the order of $400,000 to $500,000 a room, he said. Details were still being worked out.

A spokeswoman for the group said construction costs for the hotel could be around $70-80 million.

The proposed hotel will be linked to the current exit on the site linked to Outram Park MRT Station.

The Chiu family also owns more than half of Parkway Centre in Marine Parade and the entire office block and car park at Pearl's Centre.

It controls the Far East Consortium International Ltd (FECIL) group in Hong Kong - no relation to Singapore property giant Far East Organization which is controlled by tycoon Ng Teng Fong.

FECIL owns and operates hotels in China, Hong Kong, Macau and Malaysia under the Dorset and Cosmo brands. It also owns the Lan Kwai Fong Hotel in Hong Kong, a hip boutique establishment.

Jones Lang LaSalle Hotels executive vice-president Chee Hok Yean said that the New Bridge Road site in Singapore has a convenient CBD-fringe location.

'A hotel on the site may also cater to medical tourism given its proximity to SGH, and it will be close to the Sentosa integrated resort,' she said.

CB Richard Ellis director Leonard Tay said that the location 'capitalises on the traditional ambience of Chinatown area, a historic draw for tourists who prefer an alternative to the main Orchard Road hotel belt'.

Yesterday's state tender for the 0.45-hectare site drew six bids. The top bid was 5.9 per cent above the next highest offer of about $63.9 million or $378 psf per plot ratio (psf ppr) from New Bridge Development.

That company is controlled by Tan Koo Chuan of Yi Kai group, Melvin Poh of Fission group - the two teamed up to develop the Alexis condo that sold like hot cakes earlier this year - and Indonesian investors.

Other bidders for the site included Roxy-Pacific Developments (about $53.9 million), DS Lee Singapore General (almost $52 million), Hotel Royal Investment ($48.29 million) and Kah Motor Co Sdn Bhd ($45 million).

The Urban Redevelopment Authority launched the plot for tender from the reserve list after it received an application with a minimum bid price of $43.89 million or $259.92 psf ppr.

In June this year, a tender for a hotel site in Short Street in the Selegie Road area drew a whopping 15 bids. Fragrance Group won the site with its $15.51 million ($353 psf ppr) top bid.

A smaller pool of bidders participated in yesterday's tender for the New Bridge Road site, as it is larger and involves a much bigger outlay, analysts say.

Source: Business Times, 4 Sep 2009

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