Park Regis being sold for $250m

SINGAPORE – A deal is said to have been inked for the sale of Park Regis Singapore at about $250 million.

There is talk that a sale and purchase agreement was signed recently with a China buyer for the property, which is located along New Market Street/Merchant Road.

The asset comprises the 203-room hotel and a seven-storey office block with about 42,000 sq ft net lettable area on a site with a balance lease term of about 93 years.

The seller is Park Regis Investments, which is now controlled by a British Virgin Islands company, Great Fortune Capital, which in turn is thought to be linked to a Singaporean investor, P T Tan.

Previously, the late Indonesian mining magnate Jusuf Merukh’s family had owned a stake in Park Regis Investments. Mr Merukh had bought Park Regis Singapore for $218 million in 2010. In October 2011, CTC Tourism Holdings inked a deal to purchase the property in a transaction that valued it at $270 million, but the deal was not completed.

The hotel is managed by Australia-based StayWell Hospitality Group.

Assuming the office space is valued at $1,800-$2,000 per square foot (psf) or $75.6 million to $84 million, the hotel component would be priced at between $859,000 and $818,000 respectively per room.

If the hotel component is valued at around $900,000 per room – the price for the recent sale of the 336-room Park Hotel Clarke Quay to Ascendas Hospitality Trust – then the office space in the latest transaction would be valued at $67.3 million or $1,600 psf.

After hitting a record high last year, hotel room rates appear to have softened slightly in the first four months of 2013, according to official data. However, the impact has been mitigated by strong occupancy rates.

Preliminary estimates from the Singapore Tourism Board show that the average room rate for the January-to-April period slipped 2.2 per cent year on year to $253.70 while revenue per available room – a performance indicator – was 2.6 per cent lower at $217.80.

However, the average occupancy rate for the four months held firm, edging down just 0.3 per cent to 86 per cent. Total room revenue collected over this period was virtually flat at $940.5 million.

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Park Regis being sold for $250m