Complete Property Market Updates of Singapore

August 7, 2008

JTC launches tender to develop hotel, retail shops

Filed under: Commercial,General,Hotel,Regulators — Propertymarketupdates @ 4:00 am

This will add vibrancy to Changi Business Park, offer business travellers options

IN A Singapore first, the fast-growing Changi Business Park (CBP) is set to boast a hotel and retail outlets alongside the hubbub of enterprise.

A move yesterday by industrial landlord JTC Corp to invite developers to inject vibrancy into CBP with the novel development was warmly welcomed by the property market.


 
The 4.7ha site on offer, next to Singapore Expo, will include a business park’s regular features, such as an industrial space for high-tech and research and development firms.

JTC, however, yesterday asked that the proposals – which are to cover price and concept – should also include plans to develop a hotel and retail outlets. This is the first such project for a business park in Singapore.

It means business travellers attending exhibitions and conventions in the east will soon be able to rest and relax at CBP rather than heading elsewhere in town.

JTC said it expected CBP’s population of 6,000 to surge to 20,000 by 2011.

Mr Dominic Peters, the director of industrial services at property advisory firm Savills Singapore, said: ‘There is currently no retail component in and around CBP; just mere amenities like F&B outlets. A hotel and retail mixture will create some vibrancy in the evenings in and around the Changi area… The response for tenders should be overwhelming.’

The site will yield a gross floor area of 117,515 sq m, 40 per cent of which has been designated for commercial activities. About 45 per cent to 60 per cent of the area designated for commercial activities can be used for retail, leaving a floor area of 18,800 sq m to 25,900 sq m for a hotel.

Bids for the site could be in the region of a few hundred million dollars, some consultants said.

JTC has said it is catering to the rising demand for business park space and amenities in CBP.

CBP, launched in July 1997 and covering 66ha, houses a mix of high-tech, data and software enterprises, and R&D and knowledge-intensive outfits like IBM and Honeywell. It is also fast-becoming a hub for financial backroom operations, with Citibank, Credit Suisse, DBS Group Holdings and OCBC Bank poised to set up there.

Said a JTC spokesman: ‘The hotel component is a must and should be at least a three-star one catering to the business traveller.’

This is good news for CBP’s neighbour, Singapore Expo, just across Changi South Avenue 1.

A spokesman for Singex Venues said all 10 halls and 100,000 sq m of the Singapore Expo had been sold out through this month, citing the burgeoning meetings, incentive trips, conventions and exhibitions (Mice) industry.

A business hotel over the road could help meet this demand, as the country’s hotels have estimated that over 20 per cent of room revenue last year was from Mice visitors.

Said Mr Keith Oliver, the general manager of Singapore Expo: ‘The hotels will be good for our overseas exhibitors and visitors, who will find the proximity a great convenience.’

Interested developers have up to Aug 19 this year to submit their proposals for the tender.

LIVELIER MIX

‘A hotel and retail mixture will create some vibrancy in the evenings in and around the Changi area… The response for tenders should be overwhelming.’ – MR PETERS, of Savills Singapore, on the likely impact of developing a hotel and retail outlets in CBP

Source : Straits Times – 12 Jun 2008

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JTC launches hotel-in-biz park tender

Filed under: Developer News,General,Hotel — Propertymarketupdates @ 3:27 am

A hotel within a business park? That may soon become reality, as JTC Corporation launched a concept and price tender yesterday for the development of an integrated business park facility with retail and hotel components in Changi Business Park (CBP).

The 4.7-hectare Plot 61 is a ‘Business Park – White 40′ site. Forty per cent of the total gross floor area of 1.26 million square feet will go towards ‘white’ or commercial activities.

Retail activities will take up 45 to 60 per cent of the ‘white’ space, while the balance will be set aside for a hotel. ‘It would seem that there is a deliberate effort to ensure that a hotel will be built on the site, adding a complementary element to the predominantly business park use at CBP,’ said executive director of CBRE Research, Li Hiaw Ho.

According to the tender document, bidders may opt for either a term of ‘30 years with an option for a further term of 30 years’, or 60 years.

JTC said that it launched the tender to meet rising demand for business park space and amenities in CBP. The working population in the park could rise from 6,000 to 20,000 by 2011.

The integrated development would house firms in the high-technology, high value-added and knowledge-intensive industries. CBP is already attracting backend operations from financial institutions.

According to Knight Frank’s senior manager of industrial business space Chow Kok Seng, rents in CBP can range from $3.50 to $6 psf.

He believes that the site may attract three or more bids from private developers, and Soilbuild Group Holdings could be one of them. The firm has developed Eightrium @ CBP, and recently won a JTC award to build, own and operate a stack-up factory at Tanjong Kling.

He also notes that private developers may offer bids ranging from $130 to $167 psf.

Observing that Plot 61 is larger than a previous site which was awarded to United Engineers in Q4 2007, Mr Li said that ‘Plot 61 is likely to draw bigger developers which have the experience with large mix-used developments.’

The design concept probably needs to have a ‘wow’ factor because JTC may want the development to be a showcase, according to Chesterton International’s head of research and consultancy Colin Tan. Therefore, he does not expect the award to be based solely on the bid price.

CBRE Research’s Mr Li is optimistic on the integrated development’s appeal. ‘The proposed hotel would be able to draw guests that are working on a short-term basis in CBP or at Changi Airport, as well as participants of events held in the Singapore Expo,’ he said.

Interested developers have up to August 19 to submit their proposals.

Source : Business Times – 12 Jun 2008

July 10, 2008

Raffles Hotels to bring its brand to Moscow

Filed under: General,Hotel — Propertymarketupdates @ 4:24 am

RAFFLES Hotels will leave its mark in the Russian capital with a new namesake luxury hotel set to open here in 2011.

It inked a management agreement here yesterday with Russian firm ALT Corporation, which is bringing the Raffles brand to Russia.

Raffles Moscow will be owned by ALT Corporation and managed by Singapore’s Raffles Hotels and Resorts, which has 22 hotel projects around the world.

The hotelier has been eyeing Russia for a ‘couple of years’, said Mr James Kaplan, senior vice-president of global development at Fairmont Raffles Hotels International, the parent company of Raffles Hotels and Resorts.

‘Russia is becoming a very important economic and political powerhouse, and we want to be part of it,’ he told reporters.

It chose Moscow because the Russian capital is attracting more business travellers and tourists.

Last year, four million people visited Moscow, a 7.5 per cent increase from the previous year.

This has created a growing demand for top hotel accommodation, which is currently in short supply here as several Soviet-era hotels have been torn down to make way for new developments.

One result of the squeeze on hotel rooms is sky-high room rates. Moscow has one of the highest rates in the world.

Raffles Moscow will be pitched right at the top, with room rates starting at around US$800 to S$1,000 (S$1,400) a night.

The average room rate for Moscow’s top hotels has grown annually by 18 per cent since 2003.

Raffles also has plans to open a hotel in St Petersburg.

Senior Minister Goh Chok Tong, who is here on a four-day visit and witnessed the signing ceremony, described Raffles as an example of a Singapore company which is courted by Russian business partners because of its brand name.

Other major international hotel chains are also making a beeline for Moscow.

The Ritz Carlton opened here last year, and the Four Seasons and Hotel Intercontinental have projects under construction now.

But Raffles believes its new 130-room hotel in the heart of the city – in the Kitay-Gorod district – will be top of the line.

Mr Vladimir Pereverzev, chairman of ALT Corporation’s board of directors, said Raffles represents the ‘highest standards of hospitality and service’.

The new hotel will be in a heritage building and is a three-minute walk from Red Square and near top-end shopping centres.

Raffles Moscow will be part of a larger development that includes apartments, galleries and historic buildings such as an 18th century Russian Orthodox church, and the house where French emperor Napoleon Bonaparte occasionally stayed when he was in the city.

RUSSIAN ATTRACTION

‘Russia is becoming a very important economic and political powerhouse, and we want to be part of it.’ – MR JAMES KAPLAN, senior vice-president of global development at Fairmont Raffles Hotels International

Source : Straits Times – 7 Jun 2008

Raffles Hotels makes its mark in Moscow

Filed under: General,Hotel — Propertymarketupdates @ 4:22 am

RAFFLES Hotels & Resorts yesterday signed a management contract to stamp its brand on a 130-room luxury hotel a stone’s throw from Red Square and the Kremlin.

Opening in 2011, Raffles Moscow will be housed in a mid-17th century building – and is likely the oldest heritage building in Raffles’ portfolio of 22 hotels.

Located in Moscow’s Kitay-Gorod district, it is a three-minute walk from Red Square and the Kremlin, and 10 minutes from the Bolshoi Theatre, plus being right next to the ‘Tretyakovsky Proyezd’, a strip housing the most luxurious and prestigious shops in Moscow.

Interestingly, Kitay- Gorod popularly translates into ‘Chinatown’ although ‘Kitay’ which means ‘Cathay’ is likely to be derived from the architectural style of the old walls of the quarter.

The building, which is under an investment contract between Moscow government and ALT Corporation, will soon be redeveloped.

It’s also part of a larger development that will include apartments, high-end retail galleries as well as historic buildings, such as an 18th century Russian Orthodox Church and a house where Napoleon Bonaparte had stayed before.

The contract was signed by Vladimir M Pereverzev, chairman of the board of directors, ALT Corporation, and Diana Ee-Tan, president, Raffles Hotels & Resorts yesterday, witnessed by Senior Minister Goh Chok Tong and Lee Yi Shyan, Minister of State for Trade and Industry, who were also in Moscow.

Raffles Moscow will also feature six restaurants and bars and RafflesAmrita Spa, which at 1,300 square metres, will be one of the largest spas in Moscow.

Ms Tan said that Moscow is a fascinating destination with great appeal to world travellers.

‘In terms of tourism growth, the city enjoyed a robust growth of 7.5 per cent in international tourist arrivals last year and a phenomenal growth of 16 per cent in revenue per available room.’

Mr Pereverzev said that the company chose Raffles after examining several global hotel brands and chains, because the brand’s standards correspond to the requirements of the luxury hotel.

Source : Business Times – 7 Jun 2008

July 8, 2008

Hotels need long-term plan for F1 packages: study

Filed under: General,Hotel,Property Add Value — Propertymarketupdates @ 4:25 am

HOTELS need to have in place a long-term pricing strategy when it comes to room rates and hospitality packages for the Formula One race to ensure that visitors keep coming back for subsequent races.

Integrated Decisions and Systems International Inc (IDeaS), which provides revenue optimisation software to the hospitality industry, released a study conducted last September which examined two Grand Prix weekends in Shanghai, Kuala Lumpur (KL) and Melbourne.

While both occupancy and daily room rates saw an increase on average, both Shanghai and KL did not achieve full occupancy. Instead, hotels in the two cities saw occupancies of 87 per cent and 85 per cent respectively on Saturday night of the race weekend.

This could be due to weaker demand from F1 fans than anticipated, coupled with insufficient bookings from base business such as groups and air crew, the study said. A mix of customer base – both leisure and base bookings – would be ideal to maximise revenue.

Average daily rate for hotel rooms should be 55-60 per cent higher during the race weekend compared with surrounding weeks, while revenue per available room (RevPAR) generally registers an 80-90 per cent jump, the study recommends.

For Singapore, reasonable prices could prove an added incentive for visitors, should the novelty of a night race lose some of its shine over the next few years.

However, cancellations also reached a high as people might be inclined to shop around, said IDeaS’ director of services, Klaus Kohlmayr, who suggested that in addition to deposits or cancellation charges, hotels should consider overbooking their rooms. Describing overselling as a ‘manageable risk’, he pointed out that cancellation was averaging 60 per cent higher during the race period in the three markets analysed.

A review of the booking curves for Shanghai and KL also revealed that bookings began to flow in much closer to the actual date, with the majority of demand occurring about two to three months before the race itself and over 50 per cent of individual reservations taking place within a month of arrival.

Source : Business Times – 5 Jun 2008

June 27, 2008

Raffles Hotel won’t be sold after all

Filed under: General,Hotel — Propertymarketupdates @ 3:42 am

Consortium that inked in-principle deal declines to say why sale fell through

A PLAN to sell the historic Raffles Hotel again has fallen through.

The Business Times (BT) yesterday reported that a consortium led by former Credit Suisse banker Mark Pawley, which had inked an in-principle deal to buy the hotel earlier this month, was ‘very disappointed’ with the outcome.


WHAT A PITY: ‘This would have involved an assured distinct identity for Raffles Hotel as a flagship for Singapore in the international hospitality industry and a rejuvenation of the hotel.’ – SPOKESMAN FOR THE CONSORTIUM, expressing disappointment over the failure to buy Raffles Hotel (above) — ST FILE PHOTO

Its spokesman confirmed that the deal was off.

‘This would have involved an assured distinct identity for Raffles Hotel as a flagship for Singapore in the international hospitality industry and a rejuvenation of the hotel,’ the paper quoted her as saying.

Citing confidentiality clauses, she declined to give reasons why the deal soured.

But she denied that there was any issue with the source of the funding, which is believed to be a family trust linked to a European family.

If the deal had gone through, the 121-year-old historic hotel and its adjoining shopping arcade would have changed hands for the second time in three years.

The agreed price was reportedly about $650 million – more than triple the $200 million paid by its American and Middle Eastern owners in 2005.

This was seen as a reflection of the strong boost in demand for hotel space in Singapore in recent years, with the country’s fast-growing visitor arrivals.

Mr Pawley is the chief executive of Singapore-based Oxley Capital Group, a private investment house focusing on real estate and private equity.

While he was head of the Asian real estate, gaming and lodging business at Credit Suisse Investment Banking in Asia, he was involved with the $1.7 billion sale of the entire Raffles Holdings’ hotel portfolio – including Raffles Hotel in Singapore – to United States-based private equity firm Colony Capital in 2005.

Colony later merged that portfolio with Fairmont Hotels & Resorts’ assets to create Fairmont Raffles Hotels International (FRHI). Colony reportedly holds about a 40 per cent stake in FRHI, while Saudi Prince Alwaleed bin Talal’s Kingdom Hotels International owns the rest.

On May 8, FRHI announced that it had reached an in-principle agreement to sell off Raffles Hotel. But as with its past real estate transactions, any hotels sold would continue to be part of the company’s hotel collection.

FRHI’s hotel management arm, Raffles Hotels & Resorts, also secured a long-term management contract to manage the hotel, reportedly for 40 years.

Market watchers told BT that most existing hotel groups would think twice about buying a hotel with a long-term management contract from the seller. They speculated that this clause might have scuppered the deal.

Source : Straits Times – 31 May 2008

Wheels come off Raffles Hotel deal

Filed under: General,Hotel,Property Deal — Propertymarketupdates @ 3:18 am

Proposed sale to consortium fails to materialise

The proposed sale of Raffles Hotel is off.

A spokeswoman for the consortium led by former Credit Suisse banker Mark Pawley that was to have bought the Singapore icon confirmed yesterday: ‘We regret to say that the sale will not be completed as planned. The consortium is very disappointed with the current outcome as we had hoped for a win-win solution involving all parties.

‘This would have involved an assured distinct identity for Raffles Hotel as a flagship for Singapore in the international hospitality industry and a rejuvenation of the hotel. We will continue to actively explore other opportunities to contribute to Singapore.’

She declined to give reasons for the deal not being completed, citing confidentiality clauses. The deal was reported to have been in the range of about $650 million and would have included the adjoining shopping arcade. But when asked about talk that there might have been some issues with the source of the money for the purchase, she replied strongly: ‘The source of the money has always been the same. This has never been an issue and there is no basis for these allegations.’

On suggestions that the consortium might have faced funding problems, the spokeswoman said: ‘We have the money. To say otherwise is baseless.’

BT understands that the completion of the sale was expected yesterday. The in-principle agreement for the deal was announced on May 8.

Fairmont Raffles Hotels International (FRHI), the owner of the landmark hotel and adjacent shopping arcade, was to have secured a very long-term management contract, reportedly for 40 years, to manage the hotel under its hotel management arm, Raffles Hotels & Resorts.

Colony Capital holds about 40 per cent in FRHI while Saudi Prince Alwaleed bin Talal’s Kingdom Hotels International owns the rest.

FRHI’s May 8 statement had said that similar to its past real estate transactions, any hotels sold would continue to be part of the company’s hotel collection and managed under long-term management contracts. Industry observers say that this is crucial to FRHI’s plans to spin off and float a hotel management arm.

‘Most existing hotel groups would be reluctant to purchase a hotel with a long-term management contract from the seller. And frankly, Fairmont Raffles would jealously guard their proprietary management systems from any potential hotel owner that is also in the business,’ a market watcher said.

Source : Business Times – 30 May 2008

June 24, 2008

Mid-tier, upscale hotels faring best: STB figures

Filed under: General,Hotel,Regulators — Propertymarketupdates @ 3:25 am

MID-TIER and upscale hotels have fared best among different types of hotels in the current tourism boom.

The Singapore Tourism Board (STB), releasing the latest tourism statistics here, has grouped the hotels into four classes and released figures on their performance for the first time.

The four are:

Luxury hotels: those in prime locations or historic buildings (4,500 rooms);

Upscale hotels: boutique hotels and those in prime locations, charging slightly lower rates (12,400 rooms);

Mid-tier hotels: those in commercial zones (9,500 rooms); and

Economy hotels: those with budget rooms in outlying districts (3,800 rooms).

The STB declined to cite examples of hotels in each category, but going by its descriptions of each, luxury hotels include the likes of The Ritz-Carlton Millenia; upscale ones include Orchard Hotel; mid-tier hotels cover Link Hotel in Tiong Bahru and economy hotels include Hotel Bencoolen.

Going by STB figures, upscale and mid-tier hotels did best in average room occupancy, average room rate and revenue per available room last month.

Among the four categories, upscale hotels saw the biggest jump in revenue from each available room – 27.9 per cent – from a year ago. Revenue per available room is calculated by multiplying average room occupancy by average room rate.

Mid-tier hotels had the biggest increase in average room rates, up 28.2 per cent over last April’s.

Mr Colin Tan, director of research and consultancy at Chesterton International, said the sound performance by mid-tier and upscale hotels could have come from the room crunch and higher demand for these hotels.

The average hotel occupancy rate stood at 84 per cent last month, at an average room rate of $254. Hotels are expected to earn $186 million from their rooms, up 30.1 per cent from last April.

Knight Frank director of research and consultancy Nicholas Mak, noting an uptrend across all four hotel categories, said that, by releasing such data, the STB is helping investors judge the industry’s state and decide which categories are worth putting money into.

Chesterton International’s Mr Tan surmised that the recent ‘no-bid’ situation for a 0.9ha Little India hotel site could have spurred the STB to make this information part of its monthly updates.

The plot above Little India MRT station made the news last week as the first instance in seven years where a government land tender failed to draw bids.

Mr Tan said one reason could be that the site is suitable for mid-tier or budget accommodation and developers had the idea returns on these types of hotels are lower.

However, he added, with STB information that all sectors are doing well, investors may be spurred to take up non-prime land to build non-luxury hotels.

The STB confirmed it made the data available ‘to facilitate their business and investment decisions’.

Fuelling the growth of hotels is a rise in the number of tourists. Last month was another sterling month, with 826,000 arrivals: Indonesians led the charge with 131,000, followed by 107,000 Chinese, 63,000 Australians and about the same number of Indians, and 53,000 Malaysians.

Source : Straits Times – 28 May 2008

June 19, 2008

Central: More hotels

Filed under: Commercial,Education,General,Hospital,Hotel — Propertymarketupdates @ 5:52 am

LIVE

·  130,900 new homes, in towns such as Toa Payoh, Queenstown, Bukit Merah and Boon Keng, as well as at Kallang Riverside, Tanjong Rhu, Singapore River and Sentosa

WORK

·  Extension of the Central Business District at Marina Bay and along Beach Road/Ophir-Rochor Road

·  New offices at Paya Lebar Central

·  Further development of office and business parks at one-north

PLAY

·  New hotels at Chinatown, Tanjong Pagar, Singapore River, Kampong Glam, Little India, Farrer Park, Paya Lebar, Kallang Riverside, Balestier and Sentosa

·  Sports Hub at Kallang will have a National Stadium, aquatic and water leisure centre, multi-purpose indoor arena, sports library and museum

·  New park connectors and Labrador boardwalk linking Southern Ridges to VivoCity, HarbourFront and Southern Waterfront

·  New events at Singapore River

Source : Straits Times – 24 May 2008

West: More greenery

Filed under: Commercial,Education,General,Hospital,Hotel — Propertymarketupdates @ 5:50 am

LIVE

·  46,000 new homes near MRT stations, parks and waterbodies, such as at Jurong East, Jurong West, Hillview and Choa Chu Kang

·  A new general hospital in the Jurong Lake District by 2015

·  A shopping mall with a library and bus interchange at Clementi town centre

·  New campuses for the Canadian International School and River Valley High School in Jurong West by next year and 2015, respectively

·  Third Institute of Technical Education regional campus in 2010

WORK

·  2,500ha of land set aside in Jurong and Tuas for industrial uses

·  750,000 sq m of commercial space for offices, shops and restaurants in Jurong Gateway

TRAVEL

·  The East-West MRT line will be extended west

·  The Downtown Line 2 will connect parts of the region to the city centre

PLAY

·  Jurong Lake District will have edutainment attractions, dining and lifestyle destinations and a new park by the lake

·  World-class Science Centre next to Chinese Garden MRT Station

·  Interpretative Centre and boardwalk at the Bukit Timah Nature Reserve

·  Boardwalks and boating activities at Jurong Lake and Pandan Reservoir

·  Singapore’s first motocross venue at Tuas

·  More parks and park connectors

Source : Straits Times – 24 May 2008

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