River Valley hotel plot offers CapLand-CDL integration potential with Liang Court

Thu, Jul 25, 2019

THE appearance of a site in River Valley Road for a hotel development to be integrated with the Fort Canning MRT Station, in the second-half 2019 Government Land Sales Programme, comes at an oppportune time for CapitaLand and City Developments Ltd (CDL).

The pair recently gained full control of the ageing Liang Court complex next door, after an equal joint venture that they had set up completed a S$400 million acquisition of Liang Court mall from an entity linked to PGIM Real Estate.

There are two other components in the Liang Court mixed-development complex: Somerset Liang Court Singapore serviced residence, which is owned by CapitaLand's listed unit Ascott Residence Trust; and the Novotel Singapore Clarke Quay hotel, owned by CDL's indirect subsidiary CDL Hospitality Trusts (CDLHT).

While CapitaLand and CDL's immediate priority is the daily operations of the recently-acquired mall, market expectations are that they will also be exploring a redevelopment of the overall Liang Court complex. This would be facilitated by the fact that control of the mixed development has tightened from three parties previously to just two. The Liang Court complex, which was completed in the 1980s, is getting on in years and is ripe for redevelopment.

It would not be surprising if the two developers have their eyes on the 1.07-hectare River Valley hotel plot, which was unveiled on the reserve list of the H2 2019 GLS Programme released early last month.

Clinching the hotel site and integrating it with the Liang Court plot, which is zoned for commercial and residential use, would make for a more comprehensive development scheme with a range of offerings to cater to changing consumption trends. It will also help rejuvenate the area, which is attractively located along the Clarke Quay stretch of the Singapore River.

Towards one side is the prime Orchard Road shopping belt, and on the other, Boat Quay, lined with conservation shophouses with F&B outlets, and the Raffles Place financial district.

A new integrated development incorporating the River Valley hotel plot and the Liang Court site can be expected to include apartments for sale to help partially fund the project. It may also include co-living, co-working, office and retail spaces. And, of course, a hotel.

However, instead of having the usual four or five-star hotels which are the staple in the Orchard Road shopping belt, some new concepts could be experimented with. Many travellers these days, be they millennials or baby-boomers, prefer affordable luxury accommodation.

Given that they spend most of their time outside a hotel, compact rooms equipped with work tables/workbenches and plugged for the tech savvy can be a chic offering.

In December this year, the Urban Redevelopment Authority (URA), acting as the state's land sales agent for the River Valley hotel plot, will make available for application this site, which is on the reserve list. Following that, any party keen to bid for this site would have to first make an application to URA, accompanied with an undertaking of a minimum price for this site. If this price is acceptable to the state, URA will launch the tender for the plot.

Will CapitaLand and CDL team up to apply for the site's release?

Well, it is a common belief in developers' circle that parties who successfully trigger sites on the government reserve list, seldom end up winning the site at the subsequent tender.

Regardless of who triggers the release of this hotel plot, a CapitaLand-CDL tie-up may or may not clinch the land parcel. If they fail to win the site, the pair can still proceed with redeveloping their adjacent "commercial and residential" zoned site, which is big enough on its own at nearly1.3 hectares.

The new project can complement the hotel that will be built next door and, together, form a cluster to help revitalise this part of Clarke Quay.