SINGAPORE (THE BUSINESS TIMES) - The Porcelain Hotel, a 138-key boutique hotel in Chinatown, is up for sale via expression of interest with a guide price of $115 million, joint marketing agents CBRE and Edmund Tie said on Thursday (Feb 27).
Housed in a row of adjoining conservation shophouses at 46 to 50 Mosque Street, the 99-year leasehold hotel occupies a land area of 10,143 sq ft and an estimated gross floor area (GFA) of 38,686 sq ft.
The guide price works out to about $830,000 per key or $2,950 per sq ft (psf) based on GFA. These are lower than prices of recent transactions of hotels and shophouses, according to the marketing agents.
Recent hotel transactions include Wangz Hotel which was sold at over $60 million ($1.5 million per key) and Wanderlust Hotel which changed hands at $37 million ($1.3 million per key).
As for shophouses, recent transactions in the Chinatown precinct include 76 Pagoda Street at $13.3 million ($3,500 psf) and 31 Pagoda Street at $16.3 million ($4,779 psf).
The Porcelain Hotel spans four storeys, and the majority of its room sizes range from 86 sq ft to 172 sq ft, with a selection of larger units up to 452 sq ft.
The buyer can opt to acquire the property either with vacant possession or through a sale and leaseback arrangement, the marketing agents said.
"With a leaseback arrangement in place, the buyer will have some time to plan how they would like to carry out asset enhancement initiatives to refurbish and reposition the property," said Mr Clemence Lee, senior director of capital markets at CBRE.
The new owner can choose to either self-manage the hotel or engage an independent operator.
To capitalise on the crowd, the potential buyer can explore repositioning and converting the ground floor into food and beverage use and curating a tenant mix featuring restaurants, wine bars, cafes and bistros, Mr Lee suggested.
The marketing agents expect strong interest from real estate funds, developers, family offices, and hotel or co-living operators.
Boutique hotels in Singapore with a "palatable" investment quantum are tightly held and seldom put into the market, according to Mr Lee.
Ms Swee Shou Fern, executive director of investment advisory at Edmund Tie, said The Porcelain Hotel is a "rare opportunity" for one to own a row of shophouses with hotel approval in Chinatown, where new applications for hotel use in the area are generally not supported.
"The mid- to long-term outlook for Singapore's hospitality property market is favourable given the low hotel supply pipeline over the next three to four years," Ms Swee added.
The property is a five-minute walk to Chinatown MRT station, a 10-minute drive from Orchard Road and a 20-minute drive from Changi International Airport.
The site is zoned for commercial use under the Urban Redevelopment Authority's Master Plan 2019, which means foreigners are eligible to purchase the building. There is also no additional buyer's stamp duty or seller's stamp duty imposed.
The expression of interest for The Porcelain Hotel will close at 3pm on March 27.
