EL Development has signed a memorandum of understanding with Accor for the French hotel chain to manage a new hotel that the Singapore property developer will build in Hill Street.
Accor will manage the hotel under its Pullman brand – this will be the first Pullman in Singapore, EL Development managing director Lim Yew Soon told The Business Times in a recent interview.
“Singapore is one of the major cities left in Asia where Accor has yet to have a Pullman… when Singapore is its Asia-Pacific headquarters,” he noted.
EL Development will build the 10-storey hotel on a site that it bought from Singtel this year. The hotel is likely to open in late-2021.
Subject to approval from the authorities, the plan is to have around 340 to 350 rooms – ranging from 22 square metres to 38 sq m, and with the majority around 25 sq m.
The hotel will have a pool, a fitness centre, a restaurant and some meeting rooms, but there will be no ballrooms. “This will be a business hotel but not targeting the Mice (meetings, incentives, conferences and exhibitions) and banquet segments,” said Mr Lim.
The second level will be dedicated to a carpark. “We are working with DP Architects and Accor on the design for the hotel,” he added.
Singtel, which sold the property to EL Development for S$118 million, has leased back the property – which comprises a black tower block housing the telco’s Central Exchange and two lower-rise buildings used as offices – until mid-2019.
Redevelopment work on the site is expected to begin thereafter. The all-in estimated development cost – inclusive of differential premium for change of use, a lease upgrading premium payable on one of the two land lots on which the Hill Street property sits, construction costs and expenses for fitting out the hotel – works out to around S$1.1 million per room, said Mr Lim.
This will be EL Development’s first hotel development as well as its maiden investment property.
Prior to this, its activities had been confined to developing residential and industrial projects for sale. But the group has also been on the lookout for investment properties (hotels as well as possibly office buildings) in Singapore and abroad to build up a stream of recurring income.
“We are open to developing hotels and office towers on greenfield sites, buying old buildings for redevelopment, as well as acquiring completed, income-generating assets,” said Mr Lim.
On the residential property development side, EL Development has developed more than 3,000 homes in Singapore, including Rhapsody on Mount Elizabeth, Iluminaire on Devonshire, Parc Centennial in Kampong Java Road, and Rosewood Suites in Woodlands.
It also developed the La Fiesta condo in Sengkang, which received Temporary Occupation Permit (TOP) in 2016. It expects to receive TOP for fully-sold condo developments Symphony Suites in Yishun in a few months’ time and Parc Riviera in West Coast Vale, next year.
In April this year, the group was awarded the freehold Dunearn Gardens site off Newton Road through a collective sale for S$468 million, which translates to S$1,914 per square foot per plot ratio (psf ppr). EL Development plans to redevelop the site into a 34-storey luxury condo with 348 units, comprising one- to four-bedroom units. Mr Lim estimates this project’s breakeven cost at S$2,700 psf and plans to launch the project next year.
For the time being, EL Development plans to focus its residential property development activities on Singapore. It sees growth opportunities at home, but more than that, it finds a cost advantage in operating here that may be difficult to replicate overseas.
Mr Lim and his family own not only EL Development but also construction group Evan Lim & Co.
“We can either construct our Singapore development projects or appoint other contractors if they can offer more competitive pricing. In overseas markets, we may lose this advantage as we might have to rely on the local contractors,” he said.
Evan Lim & Co is the eponymous building contractor set up by Mr Lim’s father in 1963. In 2005, the senior Lim persuaded his youngest son, Yew Soon, to join the family business. In turn, he convinced his dad that the family should diversify into property development.
Prospects looked bright, with the two integrated resorts being built then that were set to boost Singapore’s attraction to investors and tourists.
Moreover, having a property development business would help provide some construction orders for Evan Lim & Co, reducing its dependence on external jobs.
In September 2005, the company set up a property development division.
In February 2006, Evan Lim & Co acquired its first property development site through the collective sale of The Esquire in Mount Elizabeth, which it redeveloped into Rhapsody on Mount Elizabeth. The project was launched in November 2006.
In July 2007, EL Development was incorporated as a fully-owned subsidiary of Evan Lim & Co. In May 2011, it was spun off as an independent company.
Mr Evan Lim died in 2012.
Mr Lim Yew Soon, four of his siblings and their mother are the shareholders of Evan Lim & Co, EL Development as well as crane-leasing company Buildmart Industries.
His brothers Yew Ghee and Yew Chee manage Buildmart and Evan Lim & Co, respectively. Their two sisters help out with the administration and finance of the three companies.
What has given the 42-year-old managing director of EL Development the greatest satisfaction is having built up the company “from scratch to a relatively known developer in Singapore”.
For the year ended May 31, 2017, EL Development’s turnover was S$250 million, while the combined turnover for all three companies owned by the family was S$403 million.
The three businesses have a combined staff strength of 170. The family has no plans to list any of its three businesses.
Mr Lim says his greatest inspiration is his dad. “My father had started the family business from his savings as a sales representative for a British trading firm based in Singapore. He had a good future with the firm but decided to take the plunge to start his own business.
“It was due to his hard work and resourcefulness that he managed to grow the business (Evan Lim & Co) into a leading main contractor in Singapore. Without this strong foundation that he created, it would have been impossible for us to grow the business to its current scale.”