HPL land redevelopment 'can revive Orchard belt's sleepy end'

THE plots of prime land in Orchard Road owned by Hotel Properties (HPL) could be redeveloped and turned into an integrated development or serviced residences, said property analysts yesterday.

They said the land that now accommodates the Hilton Singapore and Four Seasons hotels, Forum the Shopping Mall, Ming Arcade shopping centre and HPL House could be amalgamated to revive the sleepier end of the shopping belt. Their comments came after local tycoon Ong Beng Seng launched a bid to take HPL private through a partnership with Wheelock Properties.

Mr Ong is the managing director of HPL and directly owns an 18.44 per cent stake. Wheelock owns the Wheelock Place mall, which is separated from HPL's properties by a public carpark. It has a 20.16 per cent stake in HPL.

CIMB analyst Xuan Tan noted in a report that Mr Ong's move would "strategically pave (the) way for future collaborations".

"HPL and Wheelock have long been friendly parties and own complementary assets along Orchard Road. Wheelock Place refurbished in 2012 and will benefit from potential joint efforts to spruce up the area."

Another analyst, who declined to be named, told The Straits Times that if the takeover succeeds, redevelopment efforts by a single listed firm would be easier.

He said: "Having two listed entities might complicate things as there are two sets of shareholders to please. It certainly makes sense, given how sleepy the stretch from Tanglin Road to Wheelock Place is."

Mr Danny Yeo, group managing director of property firm Knight Frank, said that though HPL's properties are "standalone", they cover a huge plot of land that could accommodate a large mixed development.

"Obviously the properties facing Orchard Road command much better value, and the buildings behind are considered secondary," Mr Yeo added. Rents of ground floor space in Orchard Road are about $15 to $20 per sq ft (psf) on average a month, but such a development could command rents of over $30 psf on average a month, he estimated.

Hotels would be part of the development, Mr Yeo noted, as well as office and retail components.

Century21 chief executive director Ku Swee Yong pointed out that the developer could consider building serviced residences instead of strata-titled condos "if they recognise the value of the Orchard Road address and brand".

However, experts said development costs as well as the different land leases could pose a problem for such a large project. The Forum, for instance, is on freehold land while the Four Seasons Hotel has a 999-year lease.

But Knight Frank chairman Tan Tiong Cheng noted that the authorities might give some incentives such as high plot ratios, "if developers can put their act together". "The whole idea is to encourage a comprehensive development of Orchard Road."

HPL's shares closed 13 cents up at $3.66 while Wheelock's shares closed two cents up at $1.835.

Source: Straits Times 17th April 2014

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HPL land redevelopment 'can revive Orchard belt's sleepy end'

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