Ascott Residence Trust has obtained provisional permission from the Urban Redevelopment Authority (URA) for the redevelopment of Somerset Grand Cairnhill Singapore into an integrated hotel-and-residential project.
“We are pleased to have obtained provisional Outline Planning Permission to redevelop Somerset Grand Cairnhill,” said Chong Kee Hiong, Chief Executive of Ascott Residence Trust Management Ltd (ARTML), the manager of the trust.
“This is part of our efforts to constantly evaluate Ascott Reit’s portfolio for potential enhancements to optimise value.”
The terms and conditions of the outline planning permission (OPP) include rezoning the site from residential to residential-and-commercial use, retaining the Al-Falah Mosque in the development and payment of the development charge (DC) and land / differential premium, if any.
The OPP also allows for a maximum gross floor area (GFA) of 43,300 sq m, of which 60 percent will be allocated for residential use and 40 percent for hotel use.
ARTML said it will look into the possibility of extending the property’s existing lease, which will expire in 2082.
“Under Appendix 2 of the Code on Collective Investment Schemes (Property Funds Appendix), the total contract value of all property development activities undertaken by Ascott Reit, together with its investments in uncompleted property developments, may not exceed 10 percent of Ascott Reit’s deposited property. Ascott Reit’s total deposited property as at 30 June 2011 is about S$2.8 billion,” said an ARTML release.
“As part of the manager’s evaluation process, the conditions of the OPP, the development restrictions under the Property Funds Appendix and the potential returns of the possible redevelopment options will be taken into consideration. The manager will only proceed if there are viable and financially feasible redevelopment options,” it added.
Chong noted that the manager’s key considerations in evaluating the options for value enhancement “would be the retention of Ascott Reit’s presence in the Orchard Road area in Singapore, the continued operations of Mosque in the development and the potential yield accretion to the portfolio of any proposed redevelopment.”
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