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
By KALPANA RASHIWALA
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.
Source:www.businesstimes.com.sg
