The national joint venture between Malaysia and Singapore, M+S Pte Ltd, on Tuesday announced it will sell the luxury hotel component of the signature Duo mixed-use project for S$475 million to Hoi Hup Realty.
M+S said it agreed to the sale of all shares of its wholly-owned subsidiary, Ophir-Rochor Hotel (ORH), the developer and owner of Andaz Singapore, to the Singapore property developer.
The proposed sale consideration of S$475 million for the 342-room Andaz works out to about S$1.39 million per key.
This will mark the highest total price ever achieved for a standalone hotel transaction in Singapore, and the third highest in Asia this year, according to M+S.
On a per-key basis, it is still lower than the Westin Singapore’s hefty price tag of S$1.5 million per room when the Marina Bay hotel was sold in 2013 to Japan-based property developer Daisho Group.
The Business Times (BT) reported in February that a potential buyer for Andaz was RB Capital, which had been conducting exclusive due diligence and possibly negotiating to purchase the hotel for S$470-480 million. On Tuesday, M+S declined to comment on this when contacted by BT.
The five-star Andaz Singapore, managed by Hyatt Hotels Corporation, opened its doors in late 2017 and was the first Andaz hotel in South-east Asia.
The hotel occupies the top 15 floors of the 39-storey Duo Tower and features a rooftop venue, an observation deck, a string of restaurants and bars, and premium meeting facilities.
The Andaz sale is subject to customary closing conditions. JLL is the appointed advisor for the transaction.
Hoi Hup Realty’s chairman Wong Swee Chun said on Tuesday: “We are attracted to the rarity of this high-quality luxury hotel offering as well as its historic significance, being one of the landmark projects by M+S.”
“We are especially excited by the strategic location of the hotel, with Andaz Singapore occupying a key node in the transformative Beach Road and Ophir-Rochor Corridor.”
Kemmy Tan, chief executive officer of M+S, said that the record price of S$475 million reflects the hotel’s potential for growth in tandem with the evolution of the Bugis district as an extension of the existing central business district.
“The proposed transaction will allow us to maximise returns to our shareholders, while handing over the reins to a very established and exciting developer in Hoi Hup to take the asset forward,” Ms Tan added.
Duo Tower is part of the two-tower mixed-use Duo development on Beach Road by M+S, which is a 60:40 joint venture between Malaysian sovereign wealth fund Khazanah Nasional and Singapore investment firm Temasek Holdings.
Aside from Andaz, Duo Tower also comprises 570,000 square feet (sq ft) of prime Grade-A commercial space on Levels 4 to 23, and a 56,000 sq ft retail component, Duo Galleria, on Level 1 and Basement 3. The other tower, Duo Residences, has 49 storeys and houses 660 units.
In July, M+S confirmed it was selling Duo’s office and retail areas for S$1.575 billion, or S$2,570 per square foot of net lettable area, to Allianz Real Estate and Hong Kong private equity firm Gaw Capital Partners.
The Duo development sits on a site with a 99-year leasehold tenure starting from July 1, 2011.
M+S will continue to own and manage Marina One in Marina Bay, which comprises 1.88 million sq ft of prime Grade A office space, 140,000 sq ft of retail space, and 1,042 luxury apartments.