Tag Archives: Farrer Park MRT

Farrer Park Hotel going though EOI

RB CAPITAL is considering sale of its 20-storey Park Hotel Farrer Park, after receiving unsolicited offers since the hotel began operations just about a month ago from the region – from both high net worth individuals as well as hotel developers/owners. RB Capital developed the project on a 99-year-leasehold site that it clinched at a state tender in 2012. The balance lease on the site is 94 years.

Most of the rooms in the hotel, directly connected to Farrer Park MRT Station, are about 22 sq m with some going up to 27 sq m. The hotel is part of RB Capital’s Farrer Square mixed development that received Temporary Occupation Permit in April. Another tower, 12 storeys high, that houses 42 medical suites has been mostly either sold or leased.

There is also a retail space about 3,584-sq-ft on the ground floor of the project facing the Farrer Park MRT Station entrance, partly leased to a restaurant. The retail space is also available for sale to the potential buyer of the hotel.

Past deals of similar type includes that for Grand Park Orchard in 2013, which was also available with either vacant possession or a management agreement. Its S$1.16 billion sale price included a substantial retail component; indicatively, the 308 hotel rooms were priced at S$460 million (translating to S$1.5 million per key). The seller in that transaction, Park Hotel Group, continues to manage the hotel. Grand Park Orchard is freehold and in the prime Orchard Road shopping belt.

The Westin Singapore in Asia Square in the financial district is another example that went for S$468 million or S$1.5 million per room in late 2013. The balance lease on the site at the time was about 93 years.

These two benchmarks are for the higher spectrum of five-star hotels due to their location, facilities and/or tenure, and one has to adjust for these various factors to estimate the price for this particular property.

Kishin RK, chief executive of RB Capital, said the 300-room hotel was recently valued at about S$390 million, or S$1.3 million per room. However they are not quoting a specific price but will let the market determine the true price of this upscale hotel through a global expressions of interest (EOI) exercise. JLL Hotels & Hospitality Group has been appointed the exclusive agent. Buyers will have the choice of buying the hotel with vacant possession, or with a management contract with Park Hotel Group.