Hotel Grand Central

[propertyinvestor]

The two new hotels will have 752 rooms replacing the 400 rooms in the building that is to be demolished.
The $130m total development cost works out to be $173k per room. The company has not disclosed the book value of the 4,044 sq m site off Orchard Road. For reference, at the end of 2006, $173m was the total book value of the sites occupied by the company's 10 hotels (of varying sizes).
The increase in gross floor area, from 19,761 square meters to 21,882 square meters, seems not much. During last year's AGM, the management indicated that the new hotels will have no commercial space, as hotel guests have a wide choice of eating outlets in the vicinity.
The management holds the view that the tourism industry may slow down in the next two years and has therefore taken the opportunity to redevelop now. The new hotels, opened when the industry recovers, may have a niche in serving budget-conscious travellers wanting to stay near the Orchard Road belt.

The commercial space does not yield as much as hotel rooms. Its better for them to designate one block similar to a hotel 81 and the other a 3-4 star hotel.

Average Revenue per available room is much higher for 3star hotels in Singapore compared to 4-5star.

Look at Global Premium hotels. Making so much more margins than Pan Pacific