M+S Pte Ltd, the national level joint venture of Malaysia and Singapore has announced the sale of its luxury Andaz hotel in the signature Duo project.
Hoi Hup Realty would buy the hotel component in the mixed-use project for a sum of for $475 million.
Announcing the sale M+S the developer cum owner of Andaz Singapore said that as a part of the deal it would sell all its shares in the Ophir-Rochor Hotel to the Singapore based property developer.
Under the deal Hoi Hup Realty would buy the 342-room Andaz property at the rate of $1.39 million per room.
This is a record-breaking deal as it achieves the highest ever price that would be paid for any standalone hotel in Singapore.
It is also this year’s third highest in Asia. However, the per room price for the hotel would still be lower than Marina Bay Hotel that was sold by Westin Singapore where it earned $1.5 million per key back in 2013.
The commercial property was picked up by Daisho Group, the property developer from Japan.
Earlier there were news reports of RB Capital planning to acquire Andaz. They had even conducted exclusive due diligence and were in negotiations to pick up this property for $470-480 million.
However, M+S remained tight-lipped about the negotiations with RB Capital with respect to the sale of this property.
Andaz Singapore Hotel is a 5-star property that is currently managed by famed Hyatt Hotels Corporation.
The operations started back in 2017 being Southeast Asia’s first hotel for Andaz.
The hotel occupies 15 levels in the 39-storey Duo Tower. There is an observation deck, a rooftop site, superior meeting facilities and several bars and restaurants.
JLL the appointed advisors for this deal stated that the sale is subject to regular closing conditions.
Wong Swee Chun, Chairman of Hoi Hup Realty stated that they were attracted by the rarity of this property as it offers world class hospitality coupled with historic significance and has been one of the landmark projects for M+S.
He added that the prime location of this hotel which has played an important role in the transformation of Ophir-Road Corridor and Beach Road has been one of the major attractions for them.
CEO of M+S, Kemmy Tan taking about the deal said that the price of $475 million, the potential that the hotel has with the transformation of Bugis District which has evolved into an important extension for Singapore’s CBD.
According to him this sale would allow them to increase returns for their shareholders. He concluded saying that Hoi Hup which is an established brand and shall take the property to greater heights.
The twin-tower mixed-use development, Duo Tower is a 60:40 joint venture between Khazanah Nasional, the sovereign wealth fund from Malaysia and Temasek Holdings, investment firm from Singapore.
Apart from Andaz, the development also has 570,000 sq ft of Grade-A category commercial space spread between levels 4 and 23.
There is also a retail component of 56,000 square feet on Basement 3 and Level 1 known as Duo Galleria. Duo Residences, the other component in the development has 660 residential units spread across 49 floors.
In the month of July M+S has confirmed its decision of selling the retail areas and the office component in the project for $1.575 billion. Gaw Capital Partners, the private equity firm from Hong Kong and Allianz Real Estate had bought these components paying $2,570 per sq ft for the NLA (net lettable area).
The 99-year leasehold site over which the Duo development has come up has 92 years left on its tenure.
After this deal M+S shall continue to own and manage Marina Bay Marina One Singapore. This asset comprises of 1,042 luxury apartments, Grade A office space and retail space totalling 1.88 million sq ft of space.