49-room Berjaya Hotel sold for $50m

20130517-bt-berjaya-hotel-sold-for-$50m-pic Buyer of Duxton Rd asset is believed to be Satinder Garcha's Elevation Group

THE 49-room Berjaya Hotel in Duxton Road has been sold for $50 million, pricing the asset at slightly over $1.02 million per room.

The asset comprises eight adjoining conservation shophouses, all three storeys high with a loft, sitting on land with a balance lease tenure of about 74 years.

The buyer is believed to be Satinder Garcha's Elevation Group. The shophouses are being sold on vacant possession. Word on the street is that Mr Garcha is expected to continue running the property as a hotel and the existing staff will be retained, although Berjaya is unlikely to continue managing the hotel.

The eight shophouses - Nos 80-87 Duxton Road - have a land area of 9,558 sq ft and gross floor area (GFA) of around 32,000 sq ft.

Besides the 49 hotel rooms, the shophouses also accommodate an office and a restaurant.

The deal is believed to have been jointly brokered by Historical Land Pte Ltd - a boutique property agency specialising in shophouses - and CBRE.

Berjaya bought the hotel and its restaurant business from Low Keng Huat for $13.25 million in 2001.

For the property's new owner, Mr Garcha, this will be at least the third conservation property he has picked up in the past year or so. Late last year, he paid $75 million for Murray Terrace - an award- winning row of 14 conserved shophouses just off Maxwell Road on a 25,151 sq ft site with a remaining lease term of about 60 years at the time.

According to earlier reports, Mr Garcha plans to convert Murray Terrace into an upmarket boutique hotel, riding on its unique location near the financial district, Chinatown and the Club Street dining area.

Earlier in 2012, Mr Garcha picked up six adjoining freehold shophouses in Syed Alwi Road in the Little India location, for $23 million. The plan is to convert the shophouses - which sit on 8,138 sq ft of land and have a GFA of about 18,200 sq ft - into an art-themed boutique hotel.

Mr Garcha, a Singapore citizen in his early 40s and an avid polo player, is also restoring the historic City Hotel in downtown Santiago facing the Plaza de las Armas. His Elevation Group has developed a string of bungalows in Singapore's Good Class Bungalow Areas as well as in Sentosa Cove.

BT Weekend reported a spike in shophouse transactions in the first quarter of this year as investors channelled funds to the commercial property sector following the January property cooling package which targeted the residential and industrial property segments. Moreover, as most shophouses in Singapore's central area are zoned for commercial use, there are no restrictions on purchases by foreigners.

Some $460.1 million of shophouse deals were transacted in Q1 2013, up 34 per cent from the preceding quarter and 60 per cent higher than Q1 2012.

The momentum has continued this quarter. A stone's throw away from Berjaya Hotel, four shophouses - Nos 97, 98, 99 and 100 Duxton Road - changed hands last month for $21.6 million. They are on nearly 4,000 sq ft of land and have a GFA of about 12,000 sq ft. They are understood to have been sold by a Singaporean to a group of investors from Hong Kong.

Historical Land recently also brokered the sale of 82 Amoy Street for $16 million. The 999-year leasehold property has land area of about 2,770 sq ft and some 8,200 gross floor area spread across three storeys and a mezzanine/attic level. The buyer is said to be a Singapore company.

Source: Business Times, 17 May 2013