The hotel industry is booming in Singapore and valuations are going up. This trend is expected to hold for the next few years as there has been shortage in new projects.
According to JLL an estimated 2,400 new hotel rooms would be completed between 2018 and the end of 2020. This is substantially lower compared to 2,918 rooms that were added last year and 4,545 rooms added in 2016.
The Hill Street property site has two adjoining land plots. Together these plots occupy a land area of 39,738 sq ft.
The bigger plot has an estimated size of 25,021 sq ft and has leasehold for 999 years while the smaller plot covers an area of 14,717 sq ft.
There are only 36 years to go for its 99-year lease to expire. The lease-upgrading premium component under the sale agreement is for extension of the lease of the smaller plot to 99 years.
Permission for lease top-up has been granted in-principle by the Singapore Land Authority subject to premium payment.
On Singtel’s part it would only be selling 99-year leasehold interest with respect to the larger plot that has lease tenure of 999 years and it will retain its interest in the land. As per URA 2014 Master Plan the plots have been zoned under the Utility bracket.
As per the provisional permission granted to Singtel by the URA last year, the redevelopment plan for the site includes a 172-room hotel along with 2,000 sq ft retail space.
The site has a plot ratio of 3.5 and that means that the maximum allowable GFA would be 139,084 sq ft.
The Hill Street property has three building blocks that where two low-rise buildings currently house Singtel’s offices and the third tower has the company’s Central Exchange. Once the sale is completed the company would most likely lease back these assets till the middle of 2019.
The location is advantageous as it has Singapore Chinese Chamber of Commerce and Industry Building and in the vicinity and Stamford House stands next to it.
The Patina, Capitol Singapore which is one of the most popular luxury hotels in the area is located in Capitol Building and Stamford House.
The 157-room hotel is just about a year old and shall open its doors next year once the dispute between its owners Chesham Properties (affiliate of the Pontiac Land Group) and Perennial Real Estate resolves expectedly by the middle of next year.
EL Development was established in the year 2007. While it is an independent property developer now it started off as a subsidiary of Evan Lim & Co. It has to its credit developed several residential and industrial projects over the years.