Owner seeking at least S$155m for Killiney Rd freehold hotel site

A Killiney Road freehold hotel development site is up for sale via an expression of interest exercise, with owner private equity firm Lucrum Capital seeking in excess of S$155 million for it.

Located in the Orchard Road precinct, the site has a land area of 13,148 square feet (sq ft) with a gross plot ratio of 2.8, and provisional permission has been obtained to rezone the site for hotel use.

This means foreigners are eligible to purchase the site with no additional buyer’s stamp duty or seller’s stamp duty imposed.

Subject to final approvals, the proposed hotel would be a six-storey, 115-room development with a street frontage restaurant on the ground floor, said joint advisers for the sale Cushman & Wakefield and JLL’s Hotels & Hospitality Group.

The development would yield a total gross floor area of about 40,000 sq ft.

The site is a three-minute walk from Somerset MRT Station and Orchard Road.

F&B (food and beverage) and lifestyle offerings in the vicinity include Orchard Central, orchardgateway, Design Orchard and TripleOne Somerset.

The site will further benefit from government plans for Orchard Road, which include new retail concepts, attractions, entertainment and events to be introduced to the Tanglin, Somerset, Orchard and Dhoby Ghaut sub-precincts.

The sale exercise closes on Oct 16, 2019 at 3pm.

Over the past 12 to 18 months, interest for hotels and hotel land has risen significantly in Singapore, said the sale’s joint advisers.

The most recent government land sale of a Club Street hotel site drew eight bids and a top bid of S$562.2 million, a record price for 99-year leasehold land at a state tender.

Recent freehold hotel land transactions include Min Yuan Apartments (S$141 million), Golden Wall Centre (S$276.2 million) and Waterloo Apartments (S$131 million).

On Monday, a Mt Elizabeth Link serviced apartment block with a land area of about 35,385 sq ft was put up for sale at a S$230 million indicative price.

Shaun Poh, executive director, Cushman & Wakefield Singapore Capital Markets, said: “We are seeing a spike of interest from local and overseas investors in hospitality assets, especially in hotel development sites where the owner can exercise flexibility to design a hotel concept that attracts certain profiles of travellers such as millennials.”

Adam Bury, senior vice-president, JLL Hotels & Hospitality Group, said no freehold hotel sites in or around Orchard Road have been transacted since Grand Park Orchard in 2013.

“Future hotel supply will increase at less than 1 per cent per annum and thus we foresee that trading performance in the market will only increase from its already strong levels,” Mr Bury added.

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