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RB Capital is seeking a buyer for Park Hotel Farrer Park (pictured) after several investors expressed their interest in acquiring the property since it opened around a month ago, reported the Business Times.
“We have received unsolicited offers for this property from the region — from both high-net-worth individuals as well as hotel developers/owners,” said RB Capital CEO Kishin RK.
Another reason to dispose the asset is that the company is considering a possible overseas real estate investment.
The 300-room property was recently appraised at approximately $390 million, which translates to $1.3 million per room. “We are not quoting a specific price but will let the market determine the true price of this upscale hotel through a global expressions of interest (EOI) exercise.”
He pointed out that buyers have the option of acquiring the 20-storey hotel with vacant possession, or let it be managed by Park Hotel Group.
The property forms part of the Farrer Square mixed-use project that obtained its Temporary Occupation Permit in April. It consists of a 12-storey tower that comes with 42 medical suites, most of which have been disposed or rented out.
The development also comes with a 3,584 sq ft retail space on the ground floor directly linked to the Farrer Park MRT station. Part of this has been rented out to an F&B outlet, while the rest of the space is under negotiation. These commercial premises may also be offered for sale to the hotel’s would-be buyer.
RB Capital acquired the site for Farrer Square on a 99-year lease from the government in 2012, meaning the hotel has a remaining tenure of 94 years.
“We expect to see strong interest for Park Hotel Farrer Park, especially in view of its availability for vacant possession, which is pretty rare,” said Nihat Ercan, Managing Director for investment sales in Asia at JLL Hotels & Hospitality Group, the marketing agent.
“There is pent-up demand for Singapore real estate. But when you look at hotel transactions across the Asia-Pacific region, investment sales volume is down this year because of a lack of available products for sale in the market. Singapore is seen as a safe haven for long-term investment and capital appreciation.”
Experts noted that the sale of The Westin Singapore hotel in Asia Square in 2013 can be used as a reference for this potential deal, as it had a remaining lease of around 93 years back then. The property was divested for $468 million or $1.5 million per room.
The global expressions of interest (EOI) exercise for Park Hotel Farrer Park will start in mid-July, added Ercan, but the closing date has not yet been decided.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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