TAKE one dusty storage space in a neglected area of a modern hotel. Plus one dark corridor. Add one bright idea.

The result: under-used space transformed into airy, sleek serviced apartment rooms that wow guests - and boost the bottom line.

That's what happened when listed developer City Developments looked at its hexagonal-shaped Grand Copthorne Waterfront Hotel Singapore in Havelock Road and realised it could get more bang for its buck if it reconfigured some of its space.

FRESH AIR: The suites at La Residenza have balconies of varying sizes. Rates start from $350 a night to $8,500 a month.

The clever idea to squeeze returns from virtually nothing at the 10-year-old hotel involved replacing the underused area with two levels of serviced apartments.

This is set to lift the hotel's capacity by up to 5 per cent, giving it 24 extra rooms.

The soon-to-be-574-room Grand Copthorne Waterfront Hotel's new addition is called La Residenza, consisting of studios and one- and two-bedroom suites ranging between 473 sq ft and 1,054 sq ft. Each comes with a kitchenette, living and dining area.

And the new income stream? Daily rates for a studio, and one- and two-bedroom suites, average from $350, $450 and $650, respectively.

Singapore's space crunch - enhancing underperforming assets to get more revenue out of them, as company annual reports put it - is not just happening with hotel rooms.

The three-storey China Square Food Centre in Telok Ayer Street will undergo a $10-million transformation into an office block this year. This comes at a time when office space is in short supply.

Other recent examples of space being transformed include The Fullerton Hotel Singapore, where 5,000 sq ft of under-utilised conference room space and a deli are this year being converted into five luxury boutiques.

The shops will include local company Raffles Jeweler, a boutique by London-based Singapore fashion designer Ashley Isham and an outlet of new local upmarket brand Voi Jewellery.

And the Mandarin Meritus Singapore will see new boutiques taking over some function rooms at its Mandarin Gallery mall, as part of the hotel's $200-million makeover.

New: The Ashley Isham boutique at The Fullerton opens this month.

With the mall's total gross floor area increased by 20 per cent to 215,000 sq ft by June next year, along with monthly rentals between $50 per sq ft and $60 per sq ft, it will allow developer and owner Overseas Union Enterprise (OUE) to obtain a yield from the conversion that is four times what the function rooms generated.

Great views

GUESTS at the Grand Copthorne Waterfront will certainly appreciate the turn of events leading to their stay: The seven serviced suites on the sixth floor, which opened last month, have open-air terraces with views of the Singapore River.

Another 17 suites on the fifth floor, where La Residenza's new lobby is located, will be ready at the end of the month.

Designed by local firm Warner Wong Design, the 5m-high rooms - which are targeted at extended-stay guests such as families - boast sleek, minimalistic interiors accentuated by trendy white and earth-tone walls and furnishings.

Mr Vincent Yeo, chief executive officer of CDL Hospitality Trusts, the real estate investment trust (Reit) that owns Grand Copthorne Waterfront, tells Life!: 'We created La Residenza's suites to tap the strong demand for premium accommodation. In this case, it calls for some innovative thinking on how to optimise the space.'

La Residenza's $9-million construction began last August and included building new walls and corridors and raising the floor on the fifth level for sewage piping.

To extend the floor area on both levels, slabs reinforced by steel girders were placed over empty space.

With that, the floor area on the sixth floor has increased by nearly 10 per cent to 12,486 sq ft.

Rates work out to at least $14,400 for a month's stay in a two-bedroom suite - close to that of a stay in a two-bedroom serviced apartment at Somerset Liang Court and Fraser Suites River Valley.

La Residenza is expected to see an 85 per cent monthly occupancy. Based on the rate of a one-bedroom suite, this works out to at least $210,000 in monthly room revenue for the developer. So it won't take long to recoup the $9-million outlay.

On the new rooms, Mr Yeo says proudly: 'This was an opportunity to enhance our hotel assets. It also optimises the value of Grand Copthorne Waterfront.'

This article was first published in Life!, The Straits Times on June 6, 2008.