Hotel Grand Pacific along Victoria Street (opposite Bras Basah Complex) has been sold for around $210 million.

The price works out to around $850,000 to $900,000 per key for the 240 room, 16 storey freehold hotel.
The buyer is a consortium of Asian investors, advised by HVS Global Hospitality Services. The consortium made an unsolicited offer to the hotel's owner, Sun Asia Paci'c Corporation (Singapore), controlled by Paul Sun, who was active in the Singapore real estate market in the 1980s and early 1990s. Tokyo born Mr Sun, who is a Singapore citizen, is now in his late 70s.

The current 16 storey block was part of a larger two block hotel asset called Allson Hotel owned by Sun Asia. In 2004, the rear block, along Queen Street, was sold to listed Hotel Royal, which has renamed it Hotel Royal@Queens.

The hotel is on land area of 25,295 square feet and its facilities include a ballroom, meeting rooms, Chinese restaurant, coffee house and swimming pool. It was last renovated three years ago.

HVS managing director Chee Hok Yean said: "The $850,000 to $900,000 price per room sets a benchmark for a four'star hotel in Singapore. This is a choice investment as the hotel sits on a freehold tenure with comparatively large-sized rooms in the city centre with a robust on-going business."

At New Market Street/Merchant Road, Park Regis Singapore was sold in 2010 for $218 million; the deal involved the 203 room, four-star hotel and a seven storey office block with about 42,000 sq ft net lettable space. At the time, the hotel component was reported to be valued at around $730,000 per room and the site had balance lease of over 96 years.

We believe that investors are increasingly looking to different property asset classes for investment returns. The price per room in Orchard area is hovering around $1.2mil and with tourism at an all time high in Singapore, we can expect the above news to be positive for hotel players whom have not 'crystalized' through REITs such as UOL (Unrated, $5.78), Hotel Properties (Unrated, $2.73) e.t.c.

Source: AmFraser