Sentosa hotel on the market for $300 million

Sentosa hotel on the market for $300 million

SINGAPORE - The hotel that was formerly known as Movenpick Heritage Hotel Sentosa and is being rebranded into a Le Meridien has been put on the market.

Sources say the asking price is S$300 million, although two recent valuations were done at S$270 million and S$284 million. These valuations work out to S$1.41 million and S$1.49 million per room respectively.

Talk in the market is that both valuations assume a similar projected average room rate, of around S$440 to S$450 per night, when the operations of the hotel under the Le Meridien branding have stabilised.

The difference between the two valuations seems to be in the assumptions of occupancy rates.

Located next to the Merlion Tower on Sentosa, the 191-room property is on a site with a balance lease term of about 59 years.

Le Meridien Singapore, Sentosa is owned by Treasure Resort Pte Ltd, which is majority owned by Rodney Tan and his family.

The Tans used to own the former Cairnhill Hotel along Cairnhill Circle, which they sold to a Wing Tai-led consortium in 1996. Wing Tai later redeveloped the site into The Light at Cairnhill condo.

Le Meridien is a brand of Starwood and with Marriott's recently completed acquisition of Starwood, the rebranding of the Sentosa hotel will allow it to leverage the enlarged membership rewards programmes and reservation systems to drive occupancies and hence revenue per available room.

This would be a key selling point of the asset to potential investors.

Potential buyers may include owners of some of the other hotels on Sentosa, including Genting (which owns Resorts World Sentosa), Far East Organisation (which is developing two hotels on the site next to the Le Meridien) and the Kwee family of Pontiac Land Group, who own the Capella.

A number of Chinese groups are also said to be studying Le Meridien Singapore, Sentosa.

Word in the market is that the owners have appointed Colliers International to find a buyer.

The property consulting group is conducting an expression of interest exercise which is slated to close on Oct 27.

Starwood took over the management of the hotel in June and has been operating it as a Le Meridien since then.

A grand opening of the rebranded property is slated towards year-end.

The property comprises a three-storey heritage building and a six-storey new block.

The interior design was done by well-known Japanese firm Super Potato.

Mr Tan and his family are understood to have acquired in June 2007 the majority stake in Treasure Resort, which owned the heritage block and an attached piece of land.

He redeveloped the property into the current hotel, preserving the heritage building and adding the new block.

The heritage block houses 62 heritage suites of about 48 square metres each, converted from old army barracks.

The newer block houses the rest of the room types - including 19 Onsen suites and two duplex penthouses.

Each Onsen suite spans 63 square metres and has an open-air deck fitted with a Japanese onsen hot tub.

The two penthouse suites are duplex units, each spanning 170 square metres and with its own rooftop garden and infinity pool.

There are also three executive suites in addition to 105 deluxe rooms. The hotel has a restaurant, a bar and 22 car parking lots.

Some local TV celebrities have had their marriage solemnised at the old heritage block with the Merlion Tower as a backdrop.

Le Meridien Singapore, Sentosa has a land area of nearly 101,600 square feet and its gross floor area is nearly 144,000 square feet.

Under the Urban Redevelopment Authority's Master Plan 2014, the site is in a conservation area with hotel use.


This article was first published on October 13, 2016.
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