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

Published November 5, 2010

OWNERS controlling at least 80 per cent of the share values and strata area of the freehold Tanglin Shopping Centre have given consent for its collective sale.

The tender for the sale is slated to be launched around the end of this month by marketing agent ERA Realty Network. With a reserve price of $1.25 billion, it will be the biggest collective sale launched for a commercial building in the Orchard/Tanglin area.

The reserve price works out to about $4,021 per sq ft of potential gross floor area - a record price if it is achieved. The assumption in the unit land price calculation is that no development charge is payable and the new owner will be able to build up to the property's existing gross floor area of 310,800 sq ft (pending verification by Urban Redevelopment Authority) - even though this slightly exceeds the maximum 287,750 sq ft allowed for the site under Master Plan 2008.

Millennium & Copthorne Hotels (M&C), the London-listed hotel arm of City Developments Ltd (CDL), disclosed in June that it had signed the collective sale agreement for Tanglin Shopping Centre. M&C holds its stake in the shopping and office complex through its wholly owned subsidiary King's Tanglin Shopping Pte Ltd. The company owns 85 freehold strata retail/office units and 325 car parking lots that have been held as a long-term investment since 1981. This works out to about 34 per cent interest in the total strata area.

Tanglin Shopping Centre has a freehold land area of 68,512 sq ft. Under Master Plan 2008, the site is zoned for commercial use with a 4.2 + plot ratio - the ratio of maximum potential gross floor area to land area - and a maximum height of 20 storeys.

'This will be a very attractive site for redevelopment into a super luxury residential project with a commercial or hotel tower, or residential units with a retail podium,' ERA said. 'Some developers are already eyeing the property in view of its prime location.'

While market watchers agree the site is prime, they say it remains to be seen whether developers will be willing to pay the steep reserve price.

The 12-storey centre comprises retail space from basement two to level six, including about two levels of medical suites; offices from levels seven to 12; and parking lots in the basement and a rear multi-storey block.


Source: http://www.businesstimes.com.sg