New Reporter
24-01-24, 09:56
Capri, Citadines properties in advanced sale talks as travel rebound puts hospitality back on investors’ radar
Prospective buyers conducting exclusive due diligence for Citadines Mount Sophia and Capri by Fraser, Changi City among other assets
Jan 24, 2024
WITH the return of travel, hospitality seems to be flavour of the month in the Singapore investment property sales scene.
The Business Times understands that Capri by Fraser, Changi City and Citadines Mount Sophia are among the assets for which potential buyers are undertaking exclusive due diligence.
An expression of interest is also said to have closed in the fourth quarter of 2023 for the 299-apartment Citadines Raffles Place, though a buyer has yet to be identified.
The 285-room Dorsett Singapore, connected to Outram Park MRT interchange station, is also being quietly marketed for sale by Knight Frank, sources said. The hotel is on a site with about 85 years’ balance lease.
Its owner, Far East Consortium International (FEC), is understood to be seeking about S$1.1 million per room, which could translate to a net yield of close to 4 per cent.
The price for the 154-unit Citadines Mount Sophia serviced residence is expected to be around S$150 million. BlackRock and Weave Living are said to be doing due diligence for a potential acquisition.
Owned by CapitaLand Ascott Trust (Clas), Citadines Mount Sophia has a balance leasehold estate of about 81 years. According to Clas’ website, the property was valued at S$124 million as at Dec 31, 2022.
The serviced apartment asset is part of the 12-storey Wilkie Edge complex at the corner of Wilkie and Selegie roads. The office and retail space in Wilkie Edge was also transacted recently.
The pricing for Capri by Fraser, Changi City – a stone’s throw from the Expo MRT station and the Singapore Expo – is expected to be about S$170 million. The 313-room hotel, owned by Frasers Property, is part of an integrated project that was developed on a site that has a balance lease term of about 45 years. The hotel has a strata area of nearly 299,300 square feet; the figure includes some void space.
A joint venture (JV) that includes entities linked to two Hong Kong-based parties – FEC and Atelier Capital Partners – is said to be in exclusive due diligence for a potential purchase of Capri by Fraser, Changi City. US-based global investment manager TPG Angelo Gordon may also be part of the JV.
Room sizes at Capri by Fraser, Changi City range from 32 to 70 sq m.
Potential upside
There is scope to enhance the hotel’s value, for example, by subdividing some rooms and converting underused public areas of the hotel, including the lobby area, into revenue-generating spaces.
Capri by Fraser, Changi City is part of an integrated project that also includes a business park component (One@Changi City) and the Changi City Point mall. The project was developed on a site awarded by JTC Corporation in late 2008; the 60-year leasehold tenure for the site kicked in from April 30, 2009. The site is within Changi Business Park. Cushman & Wakefield is understood to be marketing Capri by Fraser, Changi City.
In the central business district (CBD), a sale process is also underway at the Citadines Raffles Place, within the CapitaSpring building at Market Street, on a site with a balance lease term of about 57 years.
Colliers is understood to have conducted an expression of interest (EOI) exercise that closed in Q4 of last year for the serviced apartment asset, but a buyer has yet to be identified. Based on market chatter, Olayan Group was among the parties that took part in the EOI. Market watchers expect the owner’s asking price to be at least S$1 million per room.
Citadines Raffles Place is held by a 45:45:10 joint venture involving CapitaLand Integrated Commercial Trust, CapitaLand Development and Mitsubishi Estate Co.
CapitaSpring is on a site with 99-year leasehold tenure effective Feb 1, 1982.
Property investment industry watchers said that the strong return of travel to Singapore post-Covid and a busy events calendar are helping to boost interest in the city-state’s hospitality sector.
Chee Hok Yean, Asia-Pacific president of global hospitality advisory firm HVS, said: “For anyone wanting to buy a hotel, Singapore ticks many boxes. Most travellers do not mind paying a higher price to travel to Singapore for the cleanliness and safety. Property values of hotels may go up and down – but over time, they’ve gone up in Singapore.”
Inflation-linked asset status
Another attraction of hotels and serviced apartment assets in the current environment is that they are seen as “inflation-linked assets”.
As Chee noted: “Hotels can raise their room rates to offset higher operating costs, or take advantage of big concerts and Mice (meetings, incentives, conferences and exhibitions) events. In comparison, for a typical office lease of two to three years, rental rates would be locked for the duration of the lease; a landlord would not be able to adjust rentals during that period.”
Net yields at which hotels will transact in Singapore will take into consideration factors such as the land tenure, the age and quality of the property, its location and revenue-generation capacity, she added.
A seasoned property investment sales agent said that given current high borrowing costs, most buyers would want at least a 4 per cent yield for a hotel acquisition, unless it is a freehold, well-designed asset of high quality and in an attractive location.
“In such a case, a buyer may be willing to pay a price reflecting 2 to 3 per cent (of the) net yield, for the opportunity to own the asset. Pricing a hotel is both a science and an art,” added the agent.
https://www.businesstimes.com.sg/property/capri-citadines-properties-advanced-sale-talks-travel-rebound-puts-hospitality-back
Prospective buyers conducting exclusive due diligence for Citadines Mount Sophia and Capri by Fraser, Changi City among other assets
Jan 24, 2024
WITH the return of travel, hospitality seems to be flavour of the month in the Singapore investment property sales scene.
The Business Times understands that Capri by Fraser, Changi City and Citadines Mount Sophia are among the assets for which potential buyers are undertaking exclusive due diligence.
An expression of interest is also said to have closed in the fourth quarter of 2023 for the 299-apartment Citadines Raffles Place, though a buyer has yet to be identified.
The 285-room Dorsett Singapore, connected to Outram Park MRT interchange station, is also being quietly marketed for sale by Knight Frank, sources said. The hotel is on a site with about 85 years’ balance lease.
Its owner, Far East Consortium International (FEC), is understood to be seeking about S$1.1 million per room, which could translate to a net yield of close to 4 per cent.
The price for the 154-unit Citadines Mount Sophia serviced residence is expected to be around S$150 million. BlackRock and Weave Living are said to be doing due diligence for a potential acquisition.
Owned by CapitaLand Ascott Trust (Clas), Citadines Mount Sophia has a balance leasehold estate of about 81 years. According to Clas’ website, the property was valued at S$124 million as at Dec 31, 2022.
The serviced apartment asset is part of the 12-storey Wilkie Edge complex at the corner of Wilkie and Selegie roads. The office and retail space in Wilkie Edge was also transacted recently.
The pricing for Capri by Fraser, Changi City – a stone’s throw from the Expo MRT station and the Singapore Expo – is expected to be about S$170 million. The 313-room hotel, owned by Frasers Property, is part of an integrated project that was developed on a site that has a balance lease term of about 45 years. The hotel has a strata area of nearly 299,300 square feet; the figure includes some void space.
A joint venture (JV) that includes entities linked to two Hong Kong-based parties – FEC and Atelier Capital Partners – is said to be in exclusive due diligence for a potential purchase of Capri by Fraser, Changi City. US-based global investment manager TPG Angelo Gordon may also be part of the JV.
Room sizes at Capri by Fraser, Changi City range from 32 to 70 sq m.
Potential upside
There is scope to enhance the hotel’s value, for example, by subdividing some rooms and converting underused public areas of the hotel, including the lobby area, into revenue-generating spaces.
Capri by Fraser, Changi City is part of an integrated project that also includes a business park component (One@Changi City) and the Changi City Point mall. The project was developed on a site awarded by JTC Corporation in late 2008; the 60-year leasehold tenure for the site kicked in from April 30, 2009. The site is within Changi Business Park. Cushman & Wakefield is understood to be marketing Capri by Fraser, Changi City.
In the central business district (CBD), a sale process is also underway at the Citadines Raffles Place, within the CapitaSpring building at Market Street, on a site with a balance lease term of about 57 years.
Colliers is understood to have conducted an expression of interest (EOI) exercise that closed in Q4 of last year for the serviced apartment asset, but a buyer has yet to be identified. Based on market chatter, Olayan Group was among the parties that took part in the EOI. Market watchers expect the owner’s asking price to be at least S$1 million per room.
Citadines Raffles Place is held by a 45:45:10 joint venture involving CapitaLand Integrated Commercial Trust, CapitaLand Development and Mitsubishi Estate Co.
CapitaSpring is on a site with 99-year leasehold tenure effective Feb 1, 1982.
Property investment industry watchers said that the strong return of travel to Singapore post-Covid and a busy events calendar are helping to boost interest in the city-state’s hospitality sector.
Chee Hok Yean, Asia-Pacific president of global hospitality advisory firm HVS, said: “For anyone wanting to buy a hotel, Singapore ticks many boxes. Most travellers do not mind paying a higher price to travel to Singapore for the cleanliness and safety. Property values of hotels may go up and down – but over time, they’ve gone up in Singapore.”
Inflation-linked asset status
Another attraction of hotels and serviced apartment assets in the current environment is that they are seen as “inflation-linked assets”.
As Chee noted: “Hotels can raise their room rates to offset higher operating costs, or take advantage of big concerts and Mice (meetings, incentives, conferences and exhibitions) events. In comparison, for a typical office lease of two to three years, rental rates would be locked for the duration of the lease; a landlord would not be able to adjust rentals during that period.”
Net yields at which hotels will transact in Singapore will take into consideration factors such as the land tenure, the age and quality of the property, its location and revenue-generation capacity, she added.
A seasoned property investment sales agent said that given current high borrowing costs, most buyers would want at least a 4 per cent yield for a hotel acquisition, unless it is a freehold, well-designed asset of high quality and in an attractive location.
“In such a case, a buyer may be willing to pay a price reflecting 2 to 3 per cent (of the) net yield, for the opportunity to own the asset. Pricing a hotel is both a science and an art,” added the agent.
https://www.businesstimes.com.sg/property/capri-citadines-properties-advanced-sale-talks-travel-rebound-puts-hospitality-back