Mid-sized investment properties change hands

Business Times: Tue, Sep
 
(SINGAPORE) A few mid-sized property investment sales deals have been sealed of late. The Saff hotel at Keong Saik Road, formerly known as Royal Peacock Hotel, has been sold to the Hind Group for slightly under $42.1 million, BT understands. In ano…

(SINGAPORE) A few mid-sized property investment sales deals have been sealed of late. The Saff hotel at Keong Saik Road, formerly known as Royal Peacock Hotel, has been sold to the Hind Group for slightly under $42.1 million, BT understands.

In another transaction, Silverpeak Real Estate Partners is said to have sold 182 Clemenceau Avenue, a six-storey office block next to Singapore Shopping Centre, through a private treaty deal brokered by Jones Lang LaSalle.

Sources say that the buyer is a consortium of Asia-based private investors and the deal values the property at about $74 million or nearly $1,600 per square foot on its net lettable area (NLA). Market watchers estimate the net yield could be in the low-3 per cent range.

The property, which is near Dhoby Ghaut MRT Station, is on a site with a remaining lease term of about 80 years. Most of the space in the building is leased to GE Money until 2013.

Meanwhile, closer to the Singapore River, Park Regis Singapore at New Market Street/Merchant Road, which was sold for $218 million last year, is back on the market. This time, the pricing expectation for the 203-room, four-star hotel and its adjacent seven-storey office block (with about 42,000 sq ft NLA) is said to be close to $300 million.

The property is on a site with a remaining lease term of about 95 years. Colliers International will handle an expression of interest (EOI) exercise which will close towards the end of this month, BT understands.

Market watchers say that with the tourism boom and buoyant hotel business, most four-star hotel owners would price their properties at about $1 million per room. Some support their view with the Dec 31, 2010, valuation for Mandarin Orchard Singapore of $1.135 billion or $1.08 million per room. The 1,051-room hotel is on a site with a remaining lease of about 45 years.

Park Regis Singapore’s sale will come with an existing management contract with Australia-based StayWell Hospitality Group but industry watchers suggest that the new owner may have the right to terminate this.

The property is owned by Park Regis Investments Pte Ltd, whose shareholders include the late Jusuf Merukh of Indonesia and a BVI-registered company, Great Fortune Capital Ltd, said to be controlled by another Indonesian investor.

Mr Merukh, who died in June, and his partner bought the hotel from Asok Kumar Hiranandani of Royal Brothers Group last year.

At Keong Saik Road in the Chinatown area, the nearly $42.1 million fetched for The Saff works out to around $533,000 per room based on the 79 hotel rooms carved out from the 10 restored freehold shophouses. In addition, the boutique hotel has two ground-floor shop units.

The transaction price works out to about $1,600 psf on existing gross floor area.

Lee Hon Kiun of Landmark Property Advisers is understood to have brokered the deal.

The buyer, Hind Group, is no newbie to the hotel business in Singapore. It owns Naumi Hotel, a luxury boutique property at Seah Street behind Raffles Hotel. Hind Group is controlled by members of the Jhunjhnuwala family which once owned the Imperial Hotel in the River Valley/Jalan Rumbia area.

The Saff was sold by The Royal Peacock Hotel Pte Ltd, which is controlled by the Lawadinata family from Indonesia, according to records filed with the Accounting and Corporate Regulatory Authority.

BT Weekend reported that Chijmes along Victoria Street would be put on the market through an EOI exercise. However, owner Suntec Reit is expected to sell the asset only if it receives a good price. The property, with NLA of 79,794 sq ft, was valued at $134 million at the end of last year. Colliers will handle the EOI for Chijmes which is expected to close towards the end of this month.
Source: Business Times © Singapore Press Holdings Ltd

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