Duxton Reserve, Park Avenue Changi hotels in due diligence by prospective buyers

SINGAPORE hospitality properties continue to draw investment demand.

Duxton Reserve Singapore, Autograph Collection is said to be under exclusive due diligence. Word in the market is that the price is about S$80 million.

Over in Changi Business Park, Weave Living is said to be in exclusive due diligence with a view to buying the Park Avenue Changi; the price is about S$120 million. (Weave Living is a vertically integrated owner/developer/operator of rental accommodation with offices in Hong Kong, Singapore, Tokyo and Seoul.)

JLL Hotels & Hospitality Group is the marketing agent for both properties.

When contacted by The Business Times, its senior vice-president of investment sales for Singapore, Tan Ling Wei, confirmed that a party is in exclusive due diligence for the 251-room Park Avenue Changi. She declined to confirm the party’s identity or the price.

On Duxton Reserve, Tan would say only that the first-round closing of submission in December 2024 for the expression of interest exercise received “very strong interest, mainly from local ultra-high-net-worth individuals, family offices and a couple of foreign buyers”.

The Garcha Group’s Duxton Reserve Singapore comprises eight three-storey conservation shophouses with a built-up area of about 34,000 square feet (sq ft), according to JLL’s release issued in October 2024.

Located at 80 and 83 Duxton Road, the restored heritage boutique hotel is on a 9,775 sq ft site with about 62.5 years’ balance lease. It is in the Tanjong Pagar Conservation Area.

The hotel has 49 guestrooms and suites ranging from 20 square metres (sq m) to 51 sq m. The hotel is branded Autograph Collection under a franchise agreement with Marriott International.

Word in the market is that the price at which due diligence is taking place works out to about S$2,400 per square foot on built-up area.

Satinder Garcha, founder of The Garcha Group, paid S$50 million for the property in 2013, when it was known as Berjaya Hotel. He invested a substantial sum for a revamp of the asset by British interior designer Anouska Hempel, while retaining the 49 rooms and suites.

Over in Changi Business Park, Weave Living is said to have been doing exclusive due diligence on the Park Avenue Changi hotel for some time. The hotel is part of a mixed-use integrated development owned by ESR-Reit which also includes two business park buildings (with some retail space) and a convention centre. (*see amendment note)

ESR BizPark@Changi, formerly known as UE BizHub East, was developed by United Engineers (UE) on a site awarded by JTC with a 30-year leasehold term from Feb 1, 2008, with an option to extend for a further 30 years.

To pave the way for a sale of the hotel component, discussions are said to be ongoing to seek JTC’s approval to subdivide ESR BizPark@Changi into three strata lots comprising the hotel, convention centre and the business park buildings.

Besides the 251 hotel rooms, the 10-storey Park Avenue Changi, has some serviced offices suites on levels 2 and 10. The hotel continues to be operated by UE, although observers expect this arrangement to end in a few months. The hotel is next to the Expo MRT station on the Downtown Line.

Knight Frank Singapore research head Leonard Tay noted investor interest from both private wealth and institutions in the living sectors in Singapore including hospitality. This is due to the steadily increasing number of tourist arrivals to the Republic accompanied by more meetings, incentives, conventions and exhibitions events as well as concerts by international acts, he added.

Observers also noted that the potential buying pool is wider for hospitality assets that are relatively bite-size in terms of price quantum, say, S$200 million or less.

Last year, Frasers Property sold the 313-room Capri by Fraser Changi City – a stone’s throw from Park Avenue Changi – for S$171.8 million to a consortium comprising family office Atelier Capital Partners Singapore, TPG Angelo Gordon, Heeton Holdings and Far East Consortium International (FEC).

The hotel, which has been rebranded Dorsett Changi City Singapore, is part of an integrated project on a site with a balance term of about 45 years at the time.

The new owners are expected to create additional hotel rooms while still keeping some of the larger rooms popular with staycationers. Some underutilised space in public areas including the lobby will also be converted into revenue-generating space such as restaurants.

Weave Living partnered BlackRock for a S$148 million purchase of the 154-unit Citadines Mount Sophia serviced residence last year.

*Amendment note: This story has been updated to reflect a change in the name of ESR-Logos Reit to ESR-Reit.