Ravi Chandran
JLL on May 2 announced the offer for sale K Hotel, a freehold eight-storey, 56-room hotel. JLL, the exclusive marketing agent for the sale said K Hotel is licensed to provide daily and hourly accommodation services, and is located in the city fringe – just East of the Central Region.
Located in a mature urban enclave, the freehold hotel occupies a land area of 3,725 sf and an estimated gross floor area of 12,238 sf, equivalent to a gross plot ratio of about 3.29. Spanning eight stories, K Hotel offers 56 double rooms of 12 sqm. Based on the Master Plan 2014, the site is zoned “Commercial / Institution” with a Gross Plot Ratio of 2.8.
K Hotel is a 10-minute walk away from Kallang MRT station and near Stadium and Mountbatten MRT stations. It is also readily accessible by public transportation along Sims Way, with a bus stop located less than 50m away from the hotel. Well-linked to major arterial roads, Geylang Road and Sims Avenue, the hotel is also easily accessible to other parts of Singapore via Nicoll Highway, Kallang-Paya Lebar Expressway (KPE), East Coast Parkway (ECP) and Pan Island Expressway (PIE).
With its city fringe location, K Hotel is within a short 10-minute drive to the Central Business District (CBD) and half that time to Singapore Sports Hub, Kallang Riverside and Paya Lebar Centre.
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With a rich cultural heritage and convenient locality, the hotel is a stone’s throw away to many entertainment and dining options featuring many famous restaurants such as No Signboard Seafood and coffee houses with local cuisines such as Frog Porridge, Dim Sum and Bak Kut Teh.
Key developments in the vicinity include the Sports Hub precinct for an array of amenities as well as the Kallang Riverside area that will benefit from the Urban Redevelopment Authority’s urban transformation plans to rejuvenate and inject life along Kallang River. For example, the nearby Old Kallang Airport area is slated to transform into a mixed-use lifestyle hub in the long term to unlock more of the land potential.
Mr Clemence Lee, Senior Director, JLL Singapore Capital Markets, said: “The elevated buying interests for hotels and hotel sites in Singapore throughout the past year presents an excellent divesting opportunity for the owner of K Hotel to recycle their capital.”
“Freehold hotels with a palatable investment quantum of under $50 million in Singapore are tightly held and very rarely put into the market. We expect strong interest from real estate funds, developers, family offices, and hotel operators who are looking to acquire a freehold hotel located in the city fringe in an area with good growth potential resulting from the nearby Kallang Riverside rejuvenation plans.” he added.
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Interest for freehold hotels and hotel land have been strong over the past year. Recent freehold hotel land transactions include Golden Wall Centre which was transacted at $276.2 million ($2,331 psf ppr) and Waterloo Apartments, transacted at $131 million ($2,172 psf ppr). Comparable freehold hotel transactions include Wangz Hotel which was sold at $46 million ($1.12 million per key) and Wanderlust Hotel which was sold at $37 million (S$1.28 million per key).
The asking price of K Hotel is $25 million. This reflects around $2,050 psf on the estimated GFA or around $450,000 per key.
As the property sits on land zoned for commercial / institution use, foreigners are eligible to purchase the building. There is also no Additional Buyer’s Stamp Duty (ABSD) or Seller’s Stamp Duty (SSD) imposed on the purchase of the property.
The Expression of Interest exercise closes on Friday, 7 June 2019, at 3pm.
The Singapore hotel property sector is on international investors’ radars, and hotel transactions activity are expected to rise, said a recent research report by JLL. The positive trend in hotel trading performance will continue to push pricing higher in the Singapore hotel property sector it added.
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JLL said Singapore hotel property sector is currently riding the wave of a boom in hotel land sales which has reignited the interest of would-be sellers who are considering to sell their hotel properties.
In a tightly held market such as Singapore, JLL expects to see heightened sales activity as owners exit at record prices and newcomers seek long-term strategic opportunities. Modern-day luxury consumers are increasingly seeking out experiences, placing less emphasis on acquiring material goods.
There is strong demand for high end experiential luxury travel, demonstrated by revenue per available room growth in the Singapore hotel property sector, noted the report.
This, together with a favourable tourism outlook, sets the scene for a more liquid marketplace for the Singapore hotel property sector in 2019, JLL said.
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