http://www.businesstimes.com.sg/arch...-public-tender

Published August 02, 2012

Victoria Street site triggered for sale by public tender

Minimum bid made of $148.7m for 99-yr leasehold site for hotel or commercial and residential devt

By Mindy Tan


A SITE on Victoria Street/Jalan Sultan has been triggered for sale by public tender after a developer offered a bid of at least $148.7 million, or $445.90 per square foot per plot ratio (psf ppr).

The 99-year leasehold site is zoned for hotel development, or commercial and residential development.

It has a site area of 0.84 hectare, which translates to a maximum permissible gross floor area (GFA) of 333,433 sq ft.

The maximum building height is part 4-storeys (for the section of the hotel fronting the river, and the junction of Victoria Street and Jalan Sultan), and part 30-storeys.

If the site is to be developed for hotel use, a minimum of 60 per cent of the total GFA must be used for hotel rooms and hotel-related use. The remaining GFA can be used for commercial and/or residential use.

If the developer chooses to develop a commercial and residential development, a minimum of 60 per cent of the total GFA must be dedicated to residential use, a minimum of 30 per cent for hotel rooms and hotel-related use, and a maximum of 10 per cent for commercial use.

An additional maximum permissible GFA of 280 square metres (approximately 3,013.9 sq ft) is allowed as open space for outdoor refreshment areas.

"The tourism industry is doing very well, so there is demand for hotel rooms. There are also investors looking to buy good hotels at the right price," said Lee Sze Teck, senior manager, research and consultancy, at DWG.

Assuming the the successful bidder develops a 500-room three-star hotel, the top bid could be in the range of $650-$700 psf ppr, said Mr Lee.

This translates to a breakeven cost of between $1,100 and $1,150 psf.

Indeed, the trigger price of $445.90 psf ppr is not very high when compared with the $938.20 psf ppr paid by City Developments Ltd for a Robertson Quay plot in March 2011, noted Mr Lee. He added: "The railway line between Bugis and Lavender MRT Stations runs near the site, which could translate to certain safety setbacks.

"On the other hand, if the successful bidder were to build a hotel, there's an outdoor recreational area facing the river for al fresco dining."

The subject site will be launched for public tender in about two weeks.

Unlike confirmed list sites, which go on sale on a particular date, reserve sites are triggered for sale only when a developer agrees to pay an acceptable minimum sum.