Big Hotel up for sale; expected price $260m

Post Reply
Posts: 101
Joined: Thu Apr 18, 2013 4:47 pm

Big Hotel up for sale; expected price $260m

Post by singaporeproperty » Thu Jul 25, 2013 2:12 pm

Published July 24, 2013

Big Hotel up for sale; expected price $260m

By Kalpana Rashiwala

ANDY Ong has put the Big Hotel along Middle Road on the market with an expected price of $260 million. That works out to around $844,000 per room for the 16-storey freehold hotel, which has 308 rooms.

"We've received so many offers that we've appointed an agent and want to go through this exercise once and for all," Mr Ong said when contacted by BT.

"If I realise my price expectation, I don't mind selling it, because we're evaluating quite a few hotel sites in the region - in places like Malaysia, Vietnam, South Korea, Australia and Japan," he added. The group is open to either developing hotels from scratch or converting existing buildings into hotels.

Colliers International, the sole marketing agent for the property, is conducting an expression of interest exercise that will close at 3pm on August 6.

Big Hotel is owned by a special purpose vehicle whose biggest shareholder is ERC Holdings, which in turn is majority owned by Mr Ong.

In addition to its 308 hotel rooms, the recently opened Big Hotel has three shops and 40 car parking lots. The property has a total gross floor area of 94,657 square feet and a land area of about 20,162 sq ft.

Mr Ong's preference is to sell the hotel with its existing brand name and hotel operator for a minimum of five years. The hotel is run by Gryphon Hospitality Services, which is also linked to Mr Ong.

Big Hotel has room sizes ranging from 11-50 square metres. The average room size is around 15 sq m. The hotel is achieving an average room rate of about $160 a night, said Mr Ong.

"Big Hotel has consistently achieved a high occupancy rate of 93-95 per cent since it commenced operations two months ago and this would translate to a strong cashflow and sustainable yield for the potential buyer," said Tang Wei Leng, executive director of investment services at Colliers International.

"There have been numerous enquiries on the sale of this hotel development and several offers were put forth to the owner. Hence, an expression of interest exercise is conducted to obtain the best offer for the owner," she added.

Terence Tang, managing director of Asia capital markets and investment services at the property consulting group, said: "We will be marketing this property across Asia - specifically in China, Hong Kong, Japan and Korea."

Hotel Grand Pacific - an older freehold property on Victoria Street with a much bigger average room size of 28 sq metres - transacted at $866,667 per room in October last year. Park Hotel Clarke Quay was sold this year for $893,000 per room. The 336-room hotel is on a site with a remaining lease of about 93 years.

Another SPV of ERC Holdings owns House of Tan Yeok Nee along Penang Road, which was put on the market in late May with a price expectation of over $100 million. "We received a few offers but they were slightly below what I had expected. It's still under discussion," said Mr Ong yesterday.

Post Reply

Who is online

Users browsing this forum: No registered users and 2 guests