700 BEACH is being sold in a deal that values the asset at about $120 million and the buyers are planning to redevelop the 18,400 square foot site into a 15-storey hotel with about 300 rooms, BT understands.
Market talk suggests that the buyers are in advanced negotiations with UK hospitality group Whitbread to manage the proposed hotel under the latter's Premier Inn brand.
Premier Inn is one of the UK's biggest budget hotel chains, operated by London-listed Whitbread which has a market capitalisation of about £6.9 billion (S$14.5 billion) and which also operates restaurants and coffee shops.
Located between Golden Mile Complex and Golden Mile Tower and near Nicoll Highway MRT Station, 700 Beach is an eight-storey boutique office block on a site with a balance lease term of 89 years.
International interior design firm Hirsch Bedner Associates and Fine Grain Property Consortium (Singapore) Pte Ltd are believed to have inked deals to sell their respective stakes in 700 Beach - amounting to around 18 per cent and 82 per cent of its existing strata area of 67,400 sq ft. However, Fine Grain, an Irish private-equity firm arranged by Colin MacDonald, is said to have taken a 30 per cent stake in a new joint venture with Master Contract Services that is buying the property.
Analysts estimate the proposed 15-storey hotel's 300 rooms could have an average size of 200 sq ft each, assuming a higher plot ratio is granted.
DTZ is understood to have brought in Master Contract as the majority joint-venture partner for Fine Grain for this redevelopment project.
Master Contract Services has diversified from its original construction business into property development projects. Recently, it partnered Keong Hong Construction to place the winning bid for the former Joo Chiat police station site along East Coast Road, which is designated for hotel use.
Fine Grain and Hirsch Bedner acquired 700 Beach - which was previously a small office-home office development known as In-City Lofts - in 2008 for $70 million and pumped in a further $3.5 million to reposition it as a boutique office block.
Source: Business Times 28th Janurary 2014