Last Freehold Hotel Balmoral Vip Hotel Market 100 Mil
The VIP hotel, a boutique three-storey property with 57 rooms located on Balmoral Crescent, has been closed since 2022. However, after three years of vacancy, the freehold hotel is now on the market for $100 million, which equates to approximately $1.75 million per room. The hotel, situated on a 27,658 sq ft freehold site at 5 Balmoral Crescent, has an existing gross floor area (GFA) of about 30,300 sq ft.
According to the Draft Master Plan 2025, the plot ratio for the site is 1.6. This allows for potential redevelopment into a 10-storey hotel with up to 95 rooms and a maximum GFA of 44,253 sq ft, subject to approvals. Senior Associate Group District Director at PropNex Realty, Charles Cheng, who is the exclusive marketing agent for the property, estimates that the asking price of $100 million translates to approximately $2,260 per square foot per plot ratio (ppr).
The hotel, which has been closed for the past three years, is a rare find in the prime District 10 area. According to Cheng, freehold hotel sites in this area are scarce and most have been redeveloped into private condominiums over the years. Some notable examples include the Garden Hotel at 12 Balmoral Road, which was replaced by the freehold condo Volari in 2009, and Sloane Court Hotel, which was redeveloped into the freehold condo Sloane Residences in 2022.
The scarcity of such freehold hotel land has sparked interest from various parties, including family offices, private funds, hotel owners, and hospitality operators, says Cheng. He also adds that besides a boutique hotel, the site could be adapted for serviced apartments or co-living concepts. Two potential buyers have already expressed interest in the site, with ongoing discussions.
The VIP Hotel has been owned by the Singapore family business, Asian Star Trading & Investment, for over 50 years. In 2008, the owners obtained approval to add a third storey and completed renovations in 2010. In 2022, the hotel was sold for $90 million, or $1.58 million per key, with Cheng brokering the deal. The buyer, majority-owned by a Vietnamese conglomerate, had plans to redevelop the site into a corporate hotel for visiting staff. However, these plans were put on hold due to rising construction and development costs after COVID-19.
In 2023, the hotel was listed for sale again at $128 million, but the current asking price of $100 million reflects a more realistic market situation. Cheng estimates that it would cost between $35 million to $40 million to reposition the hotel as a luxury or lifestyle property.
The recent dip in interest rates may be a good time to make a purchase, believes Cheng. “The seller of VIP Hotel is keen to divest as part of a capital recycling strategy, and buyers will welcome the more favourable interest rate environment,” he says.
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Overall, the rare find of a freehold hotel site in a prime location and the potential for redevelopment makes the VIP Hotel an attractive investment option for those looking for long-term capital preservation. However, the market timing may determine the success of the sale.