Peninsula Excelsior Hotel & Shopping Mall En Bloc Sale 2023

Peninsula Excelsior Hotel and Shopping Mall is attempting a collective sale as it hopes to capitalize on the anticipated resurgence in Singapore’s hospitality industry after the reopening of borders.

Excelsior at No. 5 Coleman Street, which is in the planning area of City Hall, started a public tender for a collective sale after getting the required 80% mandate at a reserve price of $458 million.

Based on the planned land use of 60% hotel and 40% commercial, the reserve price is equal to a land cost of $2,503 per square foot per plot ratio (psf ppr), which includes an expected land betterment charge (LBC) and lease upgrading premium.

The Peninsula Excelsior Hotel consists of 99 strata-titled commercial units and a 284-room hotel.

The owners of the commercial units stand to gain between $542,000 and $16 million, according to marketing agency Cushman & Wakefield.

The 44-year-old hotel-zoned redevelopment site is close to national landmarks including The Supreme Court, St. Andrew’s Cathedral, The National Gallery, and The Capitol.

City Hall MRT interchange which served on North–South Line and East–West Line, is just few mins walk away from the site.

The prime site size is 1,932.2 sq m for a 99-year leasehold, and the building has a confirmed gross floor area of 21,111.92 sq m, or an as-built plot ratio of 10.93.

Hotel assets, which were among the most impacted during the pandemic years 2020 and 2021, are currently rebounding with vigor, according to Ms. Christina Sim, senior director of capital markets at Cushman & Wakefield.

“The fundamentals for hospitality assets are sound and Singapore’s hospitality industry is projected to outperform its Asia-Pacific peers as borders reopen and tourism returns. “The reopening of China would benefit hotels since Chinese business and leisure traveller’s are one of Singapore’s top tourist providers,” she said.

The return of large-scale MICE (meetings, incentives, conventions, and exhibitions) events is also projected to boost hotel income per available room, she noted.

Moreover, although demand is increasing rapidly, supply is anticipated to remain moderate, with an additional 7,000 hotel rooms added between now and 2026, according to Ms. Sim.

The tender for the Excelsior site will be closed on April 18th, 2023 at 3 p.m.

The Peninsula Excelsior Hotel is one of numerous commercial properties that have joined the collective sale bandwagon in recent months.

In January, a $216 million reserve price was set for two five-storey buildings on a 999-year leasehold commercial property on Hoe Chiang Road and Lim Teck Kim Road.

According to PropNex, the buyer has the option of redeveloping the land into a hotel. This translates to a land rate of $2,662 psf ppr, including the expected land improvement fee of $60.4 million.

PropNex said that redevelopment projects such as Newport Tower, Keppel South Central, and the old Realty Centre, as well as the government’s ambition to revitalize downtown Singapore, provide an excellent chance to construct a hotel or serviced apartments on the site.

Manhattan House on Chin Swee Road was put up for tender in January with a reserve price of $280 million. After deducting the lease top-up fee and a land betterment fee, this amounts to a land rate of around $1,715 psf ppr.

The 99-year complex, completed in 1976, has 269 apartments spread over 16 levels.

According to the Urban Redevelopment Authority, the commercially zoned land might be rezoned to “Residential with Commercial at the First Storey,” with a significant chunk of the site allowing for a residential development of up to 30 storeys.

Golden Mile Tower‘s collective sale tender, which was issued with an asking price of $650 million, or $1,550 psf ppr, ended in January with a few expressions of interest and is presently in private treaty discussions with multiple parties.

But, not all have been successful in getting off the ground. Orchard Towers‘ $1.6 billion collective sale fell through in February after failing to gain the required 80% consent from unit owners, underlining the difficulty in putting together a transaction for a large mixed-use building.

The $1.8 billion collective sale offer for the People’s Park Centre in Chinatown expired in August 2022 with no bids.