A rare plot of land that’s zoned for a hotel near Singapore’s central business district has attracted a record bid as developers shift focus after last year’s property cooling measures.
Midtown Development Pte, a subsidiary of listed group Oxley Holdings Ltd., bid S$562.2 million ($415 million) for the site, the highest among eight offers received, the Urban Redevelopment Authority said Tuesday. The land adjacent to Club Street, an area known for its bars and restaurants, is the first such plot released by the government in five years. At S$2,148.50 per square foot, that sets a new benchmark for hotel sites, Nicholas Mak at ZACD Group Ltd. said.
“The high tender participation rate and rather bullish bids could be due to the rarity of hotel sites and the lack of new hotel projects in the pipeline,” Mak said. “The results show that developers have begun exploring other options to diversify their real-estate portfolios away from private residential developments due to the introduction of the July cooling measures.”
Those curbs significantly raised the cost for home builders to acquire land. Other hotel sites that last went under the hammer in 2013 — at Havelock Road and at East Coast Road — were sold at rates 65 percent and 62 percent below this most-recent bid, Mak said.
Separately, the tender period for two residential sites also closed Tuesday. An executive condominium for public housing in Singapore’s east received a top bid of S$434.5 million while another development at Kampong Java Road in one of the island’s most-expensive enclaves attracted a tepid response, with the best offer coming in at S$418.4 million
“The outcome of this batch of tenders reflects the impact of the cooling measures as developers shift their focus to the hotel and executive-condo segments,” said Tricia Song, the head of research for Singapore at Colliers International Group Inc. There’s “continued appeal for executive condominiums among middle-class households,” she said.