Sloane Court Hotel to make way for new condo

Singapore

SLOANE Court Hotel and an adjoining site in Balmoral Road will be redeveloped into a 12-storey condominium comprising about 80 units.

Building construction and civil engineering groups Tiong Seng Holdings and Ocean Sky International said that their joint-venture company entered a deal last Friday to buy the two sites for S$80.5 million.

In two separate filings with the Singapore Exchange on Monday, the two groups said their TSky Development's proposed acquisition is subject to approval by the hotel and the owners of the site.

Sloane Court Hotel, located at 17 Balmoral Road in prime District 10, has a combined site area of 3,617.9 square metres (38,943 square feet). It is zoned "Residential" and has a gross plot ratio of 1.6.

Nicholas Mak, executive director of ZACD Group, said the sale of the landmark property in Balmoral Road signals the end of a era.

"The owner of this hotel had resisted selling it for redevelopment in previous en bloc sale market booms in the past two decades," he said.

Based on available information, the land price of S$80.5 million plus an estimated development charge of S$20.2 million translates to a land price of S$1,616 per square foot (psf) per plot ratio. Mr Mak added that the condominium to come up on the site could potentially be priced at beyond S$2,500 psf after late-2018.

The average transacted price of four residential developments near the hotel - Goodwood Grand, Hallmark Residences, One Balmoral and Three Balmoral - ranged from S$1,628 to S$2,432 psf upon their completion between 2015 and 2017.

TSky Development will set up a project company to undertake the development of the two sites; the proposed acquisition is expected to be funded by a combination of internal resources and bank facilities.

Tiong Seng Holdings, through its wholly-owned subsidiary Yuan Ching Development, holds a 60 per cent stake in TSky Development; Ocean Sky International holds the remaining 40 per cent through its wholly-owned subsidiary Arctic Sky Investment.

In a report, CBRE said hotel investments in Singapore are gaining momentum following last year's lull.

Two shophouse hotels were sold in the first half of this year: In June, Hind Group sold Naumi Liora in Keong Saik Road for about S$75 million to 8M Real Estate, a privately-held boutique property investment.

Chinatown Hotel, also in the neighbourhood, was sold to Hilltop Capital for S$31 million.

CBRE said the supply of hotels will stagnate after 2020, in response to the government's earlier move to prevent over-saturation in the market.

"However, we see a renewed interest today to develop hotels, be it redevelopment or on new sites. This will help rebalance supply and demand in the market, and allow Singapore to continue as the regional frontrunner in the tourism industry," the report noted.