Property group OUE and OUE Commercial Reit will spend about $90 million to rebrand Mandarin Orchard Singapore as Hilton Singapore Orchard, OUE said yesterday.
It will be Hilton's flagship hotel in Singapore and its largest in the Asia-Pacific.
OUE is the master lessee of Mandarin Orchard, while the real estate investment trust (Reit) owns the hotel under its portfolio.
The rebranding will involve adding new meeting facilities and food and beverage offerings to meet demand for regional and global Mice (meeting, incentive, conference and exhibition) events.
The work will start in the second quarter of the year to capitalise on the slowdown in the hospitality industry due to the coronavirus outbreak.
The challenges "present a timely opportunity for us to carry out extensive renovations", said Ms Tan Shu Lin, chief executive of the Reit's manager, yesterday.
"The rebranded hotel is expected to be ready in time to take advantage of the sector's anticipated recovery."
The refurbishment is scheduled to be finished by the end of next year.
Meanwhile, Mandarin Orchard will continue to operate under the management of Meritus Hotels & Resorts, which is under the hospitality division of OUE.
The relaunched hotel will have 1,080 rooms and five restaurants and bars. Its meeting and function spaces will span 3,765 sq m and include three ballrooms.
OUE Commercial Reit expects a projected return on investment of roughly 10 per cent on a stabilised basis from its $90 million expenditure.
Its manager intends to draw down on existing loan facilities to fund the renovation.
As the capital expenditure will be expended in phases, the exercise is not expected to have any material impact on the aggregate leverage or earnings of OUE Commercial Reit for the financial year ending Dec 31, OUE said.
THE BUSINESS TIMES