EL Development Pte Ltd. will purchase Singaporean telecommunications giant Singtel's site on Hill Street, with plans to develop a hotel on the premises, according to a report by The (Singapore) Business Times.
The property will change hands for a price of between S$115 million and S$120 million, or approximately S$1,830 per square foot per plot ratio. The planned unit transaction price will include a differential premium charged for altering the usage of the plot and a lease upgrade payment, which would edge the price tag to upward of S$130 million.
The Hill Street development consists of two land plots spanning 39,738 square feet, with the larger of the two holding a 999-year leasehold term and the smaller having 36 years remaining on a 99-year leasehold. The seller is divesting its 99-year leasehold interest to the developer for the bigger plot, with the former to retain reversionary interest in the site, the report noted.
The local developer secured in 2017 provisional planning approval from the country's Urban Redevelopment Authority for a 172-room hotel — its first foray into the hotel sector — to be constructed on the plot, according to the Feb. 22 report.
Singtel first placed the asset on the market via the tender process in November 2017, with CBRE acting as its adviser. The current premises include three buildings, one of which is being used by the telecommunications company as its Central Exchange and the two other towers being utilized as office space.
The publication estimated that for EL Development to break even from the total cost it has to pay, each hotel room would have to bring in S$1.8 million, a record figure in the Lion City, with the previous highest completed per-room price being roughly S$1.5 million, set by Westin Singapore in Asia Square Tower 2 in 2013.
As of Feb. 21, US$1 was equivalent to S$1.32.