Bukit Merah Hotel Site Up For Sale

Source : The Business Times, 17 August 07

THE first of the four hotel sites to be put on the reserve list of the Government Land Sales Programme for the second half of this year is to be at the junction of Jalan Bukit Merah and Alexandra Road.

The site has an area of 0.79 ha and a maximum permissible gross floor area of 22,249 square metres (239,486 sq ft).

A spokesman for the Urban Redevelopment Authority (URA) said it has already received some market interest for the site, which is close to Mount Faber andSentosa.

The URA said: 'The area is of a mixed-use character and there is no change in planning intentions in the near future.'

Cushman & Wakefield managing director Donald Han says that, as the site is near Alexandra Hospital, a hotel there might attract 'medical tourists'.

At present, the area is predominantly an industrial and car showroom enclave.

'There's a price to everything and hotel sites are well in demand now - regardless to location,' Mr Han said.

He thinks the site could sell for between $400 to $450 per square foot per plot ratio (psf ppr), putting it in the $100 million range.

He pointed out that hotels near regional hubs are needed to help commercial growth as part of URA'sdecentralisation strategy.

Mr Han reckons a 3-star hotel with up to 400 rooms would be feasible. Rates would be below $180 per night.

Highlighting that the current $220 per night average room rate has caused some concern within the tourism industry, Mr Han said: 'More suburban or 3-star hotels may be needed to keep hotel rates affordable, particularly for the budget-conscious tourists.'

Knight Frank director (research and consultancy) Nicholas Mak believes interest for the site is not likely to come from any of the big players.

'If any developer were to be interested in this site, they are likely to be small developers or hotel operators such as Fragrance Land or Hotel 81,' he said.

For the first half of the year, URA released three hotel sites on the reserve list.

In July, a hotel site in the Tanjong Pagar area sold for $97.07 million or $562 psf ppr.