The Heeton Holdings Group has signed an agreement to purchase the Mitre Hotel, a freehold residential site located at Killiney Road, for around $121–122 million. The price works out to nearly $1,100 per square foot of potential gross floor area, which includes a $770,000 estimated development charge (DC).
Jones Lang LaSalle brokered the sale after the September closure of a tender exercise.
Intended for residential use, the 39,972 sq ft site has a 2.8 plot ratio under the 2008 Master Plan. The plot ratio is defined as the ratio of land area to the maximum potential gross floor area. The height of the building is also limited to 10 storeys. With around 110 units with an average size of 1,000 sq ft, the site can be developed into a new project.
Based on a unit price of about $1,100 psf per plot ratio (ppr), analysts estimate that the breakeven cost of Heeton for a new apartment project could reach $1,600 psf.
Earlier media reports stated that Mitre Hotel, which started operations in 1948, ceased letting rooms when it lost its license in 2002.
Owned mostly by the Chiam family, the Court of Appeal last year ordered that the property be put up for sale, ending its 12-year legal struggle over its sale.
The last time the property was put into the market was in August 2007, when it had a selling price of almost $1,800 psf ppr or about $200 million, including a $700,000 estimated DC at the time.
Analysts have observed a slight improvement in the latest property price of nearly $1,100 psf ppr, compared to the $1,022 psf ppr (including DC) that Hoi Hup paid in April 2007 for the nearby Killiney Apartments site. The site is currently being redeveloped by Hoi Hup into the Residences @ Killiney.
Heeton reported yesterday that its year-on-year net profit for the third quarter that ended 30 September 2009 jumped 143 percent to $10.5 million.