HK developer puts in top bid for hotel site

New Bridge Road parcel draws strong interest, with 6 offers made

A TENDER for a medium-sized hotel site in New Bridge Road has attracted six bids, with the top bid coming from a foreign player at $67.7 million.

By the time the tender closed yesterday, Hong Kong-based Leedon Investments had put in the highest bid, working out to $401 per sq ft (psf) per plot ratio.

This price is about 50 per cent higher than the lowest bid, and 54 per cent higher than the trigger price of $43.9 million, or $260 psf per plot ratio.

The hotel site was on the reserve list and put up for tender only after an unnamed developer committed to bid at the acceptable minimum price.

Leedon's parent company is Hong Kong-listed Far East Consortium International, which is mainly engaged in property development and hotel operations in greater China.

Leedon participated in the tender for a hotel site in Bencoolen Street back in late 2006 but came in last with a bid of $40 million.

The $73 million land parcel is now home to Singapore's first Ibis brand hotel from the Accor Group.

Other bidders in the tender include New Bridge Development, Roxy-Pacific Developments, Hotel Royal Investment and Kah Motors Co. Kah Motors had the lowest bid of $45 million.

In June, a small hotel site in Short Street attracted 15 bids. The winning bid of $15.5 million was 76 per cent higher than the trigger price.

Although the response to the latest tender was less aggressive, the bids show there is substantial interest in well-located hotel sites, according to CBRE Research director Leonard Tay.

The 99-year leasehold New Bridge Road site has a maximum gross floor area of 15,687 sq m, or 168,855 sq ft, and can be developed into a hotel with 335 rooms.

Mr Tay said the strong response signals that hoteliers believe in the fundamentals of Singapore as a tourist destination and its long-term ability to attract tourists.

Also, a hotel development in this location - near Singapore General Hospital - supports the Government's aim of attracting more medical tourists to Singapore, he said.

Source: Straits Times, 4 Sep 2009