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Thread: Far East buys Paramount Hotel, Shopping Centre

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    Published November 27, 2010

    Far East buys Paramount Hotel, Shopping Centre

    The $214m deal involves a collective sale; Far East plans to manage the hotel


    FAR East Organization has clinched Paramount Hotel and Shopping Centre along East Coast Road for $214 million.

    BT understands that Far East plans to keep the freehold asset as an investment property for recurring income although refurbishment is likely to be on the cards.

    The deal involves a collective sale and will be subject to approval from the Strata Titles Board.

    Approval has been obtained from owners controlling over 90 per cent of share values and strata floor area in the asset.

    Far East plans to manage the hotel. It is currently operated by YTC Corporation, which is selling the 229-room hotel. YTC also owns the Peninsula Excelsior Hotel at Coleman Street.

    BT understands that YTC stands to receive about $167 million for the hotel, which translates to about $730,000 per room. The balance $47 million will be payable to the owners of the 95 strata shop units in the development. The ageing hotel and shops are housed in a four-storey podium and eight-storey tower block.

    Far East was the highest of nearly 10 bidders that participated in the tender for the collective sale, which closed on Nov 23.

    The property has a freehold land area of 102,685 square feet and is zoned for hotel use with a gross plot ratio of up to 3.0 under Master Plan 2008.

    The location is familiar to Far East. It is developing Silver Sea and The Shore Residences condominium projects nearby.

    The sale was brokered by Jones Lang LaSalle (JLL). The property consultant said that the site was formerly zoned for 'local shopping' use under the 1958 and 1980 Master Plans.

    'Subject to planning approval from the authorities, the site with a potential gross floor area of up to 308,056 sq ft has varied redevelopment options such as hotel, commercial, residential or a combination thereof,' it said.

    JLL added that the $214 million purchase price works out to about $1,178 per square foot per plot ratio (psf ppr) including development charge (DC) of $40.07 million for residential use at a plot ratio of 2.1 or $736 psf ppr including an estimated $12.8 million DC for a mix of hotel and commercial use at 3.0 plot ratio.

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    Nov 27, 2010

    Paramount site goes for $214m

    Far East clinches freehold hotel, shopping centre site in largest collective sale this year

    By Esther Teo

    THE freehold site in the eastern part of Singapore occupied by Paramount Hotel and Paramount Shopping Centre has been sold for $214 million, in the biggest collective sale this year.

    Far East Organization lodged the winning bid, which is 7 per cent above the $200 million asking price, sought when the tender opened last month.

    The price works out to about $1,178 per sq ft per plot ratio (psf ppr). It also includes a development charge of $40.07 million if the site is used for residential purposes at a plot ratio of 2.1, said marketing agent Jones Lang LaSalle (JLL).

    But if the site is retained for hotel and commercial use at a plot ratio of 3.0, the Far East bid works out to $736 psf ppr, including an estimated development charge of $12.8 million.

    The land, if zoned for hotel use, could be redeveloped into a hotel and retail project with a gross floor area of up to 308,056 sq ft, and could accommodate up to 460 hotel rooms, said JLL.

    If converted for residential use, it could take a high-rise tower of 205 flats, assuming per unit size of 1,000 sq ft.

    The site has varied redevelopment options, including residential, hotel, commercial or a combination of those, but these are subject to planning approval, the company added.

    Located near the popular Parkway Parade mall, the plot faces both Marine Parade Road and East Coast Road.

    The ageing 229-room hotel and the 95 shops on the site are in a four-storey podium and an eight-storey tower block.

    The Straits Times understands that Far East will keep the site as a hotel and retail development, with some addition and alteration works expected, to rejuvenate the property.

    The hotel and shopping centre will be operated as part of Far East's investment portfolio.

    The 102,685 sq ft freehold property in District 15 was last put on the market in May 2007 at the same price, but did not find suitable takers.

    JLL national director and head of commercial investments Quek Soh Hoon said there was a good level of interest for the collective sale tender, with about 10 submissions received. Ms Quek said the bidding was competitive, with only about 5 per cent separating the top three bidders.

    'The overwhelming response and competitive bids among the bidders signify a strong interest for the prime, rare, freehold redevelopment site.

    'The location of the site speaks for itself,' she said. She cited its high accessibility and established amenities and added: 'We are confident of the great potential that the site could possibly offer.'

    The site is zoned for hotel use under the Urban Redevelopment Authority's 2008 Master Plan, but in the past, it was designated for 'local shopping' use under the 1958 and 1980 master plans.

    Singapore-based YTC Corporation owns Paramount Hotel as well as a few shop units, while the other shops are owned by different individuals.

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