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Fortuna Hotel next to Farrer Park MRT station up for sale with S$98.8m guide price
FORTUNA Hotel at 2 Owen Road, just across the road from Mustafa Centre, has been launched for sale by tender with a guide price of S$98.8 million, sole marketing agent CBRE said on Wednesday.
Its tender will close at 3pm on Dec 10.
Located at a junction along Owen Road and Serangoon Road, Fortuna Hotel occupies a freehold site of 8,332 square feet (sq ft). The site has a gross plot ratio of 3.0 and is zoned for hotel use, based on the Urban Redevelopment Authority's 2019 Master Plan.
Spanning seven storeys with an estimated gross floor area (GFA) of 47,990 sq ft, Fortuna Hotel has 106 rooms with sizes ranging from 17-49 square metres (sq m), CBRE said. It comprises one restaurant and four retail shops on the first storey, as well as a basement car park.
The guide price of S$98.8 million works out to about S$932,000 per key, or S$2,060 per square foot (psf) on the current GFA.
Foreigners are eligible to buy the property and the sale will not incur additional buyer's stamp duty or seller's stamp duty.
Having been involved in the sale of next-door The Claremont Hotel in 2019, Clemence Lee, senior director of capital markets at CBRE, said he is confident that Fortuna Hotel will appeal to investors with a long-term investment horizon. According to CBRE, potential investors include real estate funds, family offices, hotel operators and high net worth individuals.
Added Mr Lee: "As the property is to be sold with vacant possession, the new owner can immediately carry out asset enhancement initiatives to transform the subject property into an iconic or stylish boutique, or select-service hotel... At the current average room size of 26 sq m, which is considered spacious for a mid-sized hotel, there is capacity to increase the number of rooms."
He noted that the new owner could also consider converting the hotel into a co-living or serviced apartment development.
"Given that it will likely take up to two years to define the development's new positioning and to conduct asset enhancement works, the property's completion then should coincide with the recovery of tourism in Singapore as the economy gradually moves back to normalcy," said Mr Lee.
Comparable freehold hotel transactions include The Claremont Hotel sold in Q1 2019 at S$68 million, which translates to S$755,000 per key or S$2,222 psf on GFA, CBRE noted. Meanwhile, Wangz Hotel was sold in Q4 2018 at S$60 million (nearly S$1.5 million per key, or S$2,424 psf on GFA).
In its press statement on Wednesday, CBRE noted that the locality around Fortuna Hotel is gradually transforming into a commercial and medical hub with the presence of Connexion, an integrated healthcare and hospitality complex.
Additionally, the residential plot at the nearby Northumberland Road, which has been identified as one of the confirmed list sites under the government land sales programme this year, is poised to yield about 405 dwelling units upon completion, which will add vibrancy to the vicinity, CBRE said.
Orchard Road and Raffles Place are a 10-minute drive away, while Changi Airport is a 20-minute drive away.
The site used to house Hotel New World which collapsed in 1986 due to structural defects and poor-quality construction, killing 33 people.
At the time of its collapse, the building was occupied by a branch of the Industrial & Commercial Bank on the ground floor and a nightclub on the second floor. The remaining floors were taken up by Hotel New World which had 67 rooms. Fortuna Hotel then began construction in 1991 and opened in 1994.