115-room hotel at Onan Road up for grabs

Target price is around $75-$80m.

According to a release, Knight Frank launched 1 Onan Road, a 4-storey hotel with an existing 115 hotel rooms, for sale by tender.

The subject property is located in District 15, with triple frontages along Onan Road, Joo Chiat and Changi Road. The 99-year leasehold property has a strata area of 5,398 sqm (approx. 58,104 sq ft).

The existing hotel offers very spacious rooms of between 26 sqm and 41 sqm. Under the 2008 Master Plan, the site is zoned as “Hotel”. Facilities include a swimming pool on the 3 floor and a business centre located on the 1 floor.

“Investors can potentially reposition the hotel by reconfiguring and adding more rooms, subject to approval from relevant authorities. Assuming an average room size of 18 sqm and an efficiency of 65 per cent, there is a potential to yield 194 rooms. This translates to about $416,000 to $442,000 per turn key, assuming A&A cost of $6 million. It also presents an opportunity for hotelier to run it as a flagship hotel,” said Mr Ian Loh, Director & Head, Investment.

The site is within close proximity to the Paya Lebar commercial hub. Paya Lebar is envisaged as one of the commercial hubs to be developed outside the city centre as part of URA’s larger decentralisation strategy in the Concept Plan to provide alternatives for businesses and jobs closer to home.

The subject property also offers great accessibility as it enjoys the convenience of being near to Paya Lebar Interchange MRT station. It is only a mere 10 mins drive to Changi Airport and 15 mins to the city centre.

It is also easily accessible via major expressways like the PIE and ECP as well as major roads like Sims Avenue, Paya Lebar Road and Changi Road.

Prominent buildings in the vicinity include Joo Chiat Complex, City Plaza, Tanjong Katong Complex, Singapore Post Centre, Paya Lebar Square (u/c), ONE KM (u/c) and Wisma Geylang Serai (u/c).

The subject property is located opposite the upcoming new civic centre with a public plaza to be built next to the Geylang Serai Market. The government has planned to redevelop it into a lively regional centre with a distinct cultural identity.

The Urban Redevelopment Authority (URA) had unveiled the redevelopment plans for Geylang Serai and the Malay Village back in 2011. Standing in its place will be a new civic centre called Wisma Geylang Serai. The 10,000 sqm centre is expected to house a Malay Heritage Gallery, community club, Community Development Council offices and other community-related facilities.

Some of the significant land sales transacted over the past 2 years include the former Lion City Hotel sold at $313 million, 55 Changi Road sold at $44.9 million and New Changi Hotel sold at $53.2 million.

The guide price for 1 Onan Road is approximately $75 million to $80 million. The tender will close on Tuesday, 5 February 2013 at 3pm.