Capri, Citadines and other properties on the market in advance as investors turn their attention to hospitality

Hotels can raise the room rate to offset high operating costs. Or, they can take advantage of major concerts and Mice, (meetings. incentives. conferences. and exhibitions). Comparatively, in the case of a two-to-three year office lease, rental rates will be fixed throughout the duration of that lease.

She added that factors such a as the land tenure of the property and its age and quality, its location, and revenue-generating capability will be taken into account when calculating the net yields which Singapore hotels will offer.

Citadines Raffles Place with 299 apartments is said to also have been sold in the fourth-quarter of 2023. But the buyer hasn’t yet been identified.

A 285-room Dorsett Singapore connected to Outram Park MRT is also being quietly offered for sale. The hotel has a remaining lease of 85 years.

Far East Consortium International (FEC), the owner, is said by some to be seeking S$1.1 million for each room. A net yield close to four percent could result.

Citadines Mount Sophia’s 154 serviced apartments are expected to cost approximately S$150million. BlackRock and Weave Living reportedly are doing due-diligence for a prospective acquisition.

Citadines Mount Sophia was built by CapitaLand Ascott Trust, a trust owned by CapitaLand. The balance leasehold estate for the property is approximately 81 year. Clas’ website says the property is valued at S$124m at December 31st 2022.

The Wilkie Edge complex has a total of 12 stories and is located at Wilkie Road and Selegie. Wilkie-Edge office and retail property was also recently transacted.

Capri, Changi City – a few steps from Expo MRT stations and Singapore Expo – should cost about S$170m. The Frasers Property owned 313-rooms hotel is part an integrated project developed on land with a balance term of 45 years. The hotel has an area of almost 299300 feet. That figure includes void space.

A joint-venture (JV) involving entities from two Hong Kong based parties – FEC, and Atelier capital Partners – has been said to have exclusive due-diligence on a potential Capri sale by Fraser Changi City. TPG Angelo Gordon – a US global investment manager who is based in New York – may also be involved.

Rooms range in size from 32 to 80 sq m at Capri Fraser Changi City.

Potential upside

Hotel value can be enhanced by subdividing some of the rooms, and converting unoccupied public areas such as the reception area into revenue-generating areas.

Capri Changi City is a part an integrated project, which includes a Changi City Point and ONE@Changi City component. The project has been developed on a JTC Corporation-awarded site. The 60 year leasehold tenure of the site started April 30, 2009 The site is situated within Changi Business Park. Cushman & Wakefield may be promoting Capri by Fraser at Changi City.

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Citadines Raffles Place at Market Street within the CapitaSpring is also on the market, and the lease term has been extended to 57years.

A well-versed property investment sales representative said that with current high borrowing costs most buyers would expect at least a 4-percent yield for hotel purchases, unless it was a high quality, freehold asset, in a desirable location.

In such a situation, the buyer may be prepared to pay for an asset at a cost that is 2 to 3-percent (of its) net yield. It is both art and science to price a hotel.

Prospective buyers conducting exclusive Due Diligence on Citadines Mount Sophia Capri by Fraser Changi City and the other assets

Singapore’s real estate market is experiencing a surge in sales of investment properties as a result of the return to travel.

Capri Fraser, Changi City & Citadines Mount Sophia – these are just a few of the properties that are subjected to exclusive due diligence by prospective buyers.

Colliers may have held an expression of interests (EOI), but the buyer of this asset has not been identified. According to market chatter Olayan Group may have been one of the parties who took part in the EOI. Market watchers predict that the owner will ask at least S$1m for each room.

Citadines Raffles is owned by a joint partnership consisting of CapitaLand Integrated Commercial Trust CapitaLand Development & Mitsubishi Estate Co.

CapitaSpring’s site has a 99 years leasehold tenure as of February 1, 1982.

Property industry watchers have said that the strong rebound in travel to Singapore since the Covid incident and an active events calendar is helping to boost the city-state’s hospitality sector.

Singapore is an excellent place to invest in a hotel. Singapore’s safety and cleanliness are a big draw for most travellers. Singapore is a place where hotel values fluctuate wildly, but have consistently increased.

Inflation linked asset status

One of the main attractions for hotels and serviced-apartments in the current market is their inflation-linked nature.

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