Hotel Site Draws Top Bid Of $100.7m

Source : The Business Times, October 26, 2007

$762 psf ppr bid by party linked to Asok Kumar beats 6 others

A PARTY linked to Asok Kumar Hiranandani of Royal Brothers Group yesterday placed a top bid of $100.7 million or $762 per square foot per plot ratio (psf ppr) for a hotel site at New Market Steet/Merchant Roads near the Singapore River - almost 34 per cent above the next highest offer of $75.3 million by Hotel Properties unit Landeal Properties.

'We're looking at developing a 300-room businessmen's hotel as well as some commercial space on the site'- Mr Asok

The 99-year leasehold plot attracted seven bids, with the lowest offer of $52.9 million made by LaSalle Investment Management-linked Fairvalue 128.

Mr Asok told BT: 'We're looking at developing a 300-room businessmen's hotel as well as some commercial space, most likely offices, on the site. Our total investment will be at least $160 million. Hopefully, the development will be up in 21/2 years.'

He cast his top bid in yesterday's state tender through Park Regis Investments, which is controlled by A&B Hotels, whose shareholders are Mr Asok and British citizen Balbinder Singh Sohal.

The A&B Group, named after the first letters of the two men's names, owns 50 per cent of Kusido Hospitality & Property Group, which owns and operates the Leisure Inn and the Park Regis hotel brands in Australia.

Kusido owns and/or manages 17 hotels in Australia under the two brands and is in talks to acquire 100 per cent stakes in a further 23 hotels there.

In China, Kusido is in the final stages of talks to acquire stakes in 37 hotels from three hotel groups.

The proposed hotel at New Market Street in Singapore will be flagged a Park Regis, a four-star brand. Assuming A&B develops 300 hotel rooms, the total $160 million investment works out to $530,000 per hotel room. 'That's still cheaper than the $800,000 to $1 million per room being demanded by hotel sellers in the Singapore market,' said Mr Asok, who says he is looking for another hotel site in Singapore that he can develop into a Leisure Inn, a three-star brand.

The other bidders in yesterday's tender by the Urban Redevelopment Authority were Superbowl Holdings unit Superbowl Land ($71.8 million); Garden City Hotel Holdings, controlled by a Tew family ($68 million); Hotel 81-linked Lotus View ($64.1 million) and Hotel Grand Central (about $55.5 million).

Cushman & Wakefield (Singapore) managing director Donald Han says hotel site tenders have been attracting more bidders, as well as a bigger spread of players including international funds.

'That suggests further upside in Singapore hotel capital values,' he said.