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(SINGAPORE) The race for a hotel, commercial and condo site at Sentosa Cove is said to have narrowed to two contenders - City Developments and Lippo.

The Quayside Collection: The proposed development on Sentosa Cove will have hotel, commercial and condo components

The site is expected to be awarded soon and sources are tipping CityDev as the likely winner for the 99-year leasehold site.

Interestingly, sources say both parties are teaming up with the same hotel operator - Westin, which is part of the Starwood Hotels & Resorts group - to operate the 320-room hotel in the proposed development.

Industry observers suggest CityDev's bid price for the site, which is called the Quayside Collection, could be slightly over $300 million. This works out to around $420 per square foot of the proposed development's maximum potential gross floor area of 718,588 sq ft.

Market watchers say that the award of the site will mark the return of the Westin brand to Singapore after an absence of over four years. Westin Hotels & Resorts used to manage the two hotels in the Raffles City complex until its contract expired at the end of 2001.

But the Quayside Collection award is not based primarly on price. Proposals are evaluated on the hotel concept, the strength of the prospective hotel operators, positioning and branding of the hotel, development budget and source of capital, as well as the offer price and payment terms and structure, according to information released earlier in a statement on the site.

The land parcel was offered through an expression of interest exercise which closed on April 28. The land parcel comprises a plot for a seven-storey hotel with up to 320 rooms, two plots slated for a three-storey commercial (retail) project with about 61,700 sq ft of gross floor area, and two plots designated for development into six-storey condos with a total of up to 236 units.

The hotel will face the marina at Sentosa Cove and will be the first and only hotel in the upmarket waterfront housing district.

Elsewhere on Sentosa Island, though, there are currently three hotels and resorts totalling 733 rooms. Excluding the latest hotel in the Quayside Collection, another three new hotels/resorts are slated to open between this year and 2008.

The hotel and commercial plots are compulsory components of the Quayside Collection sale. And while the condo plots are optional, their inclusion in the package has been seen as the sweetener to draw bidders to develop the hotel and commercial plots.

After all, the first two condos on Sentosa Cove - Ho Bee's The Berth by The Cove and Frasers Centrepoint's The Azure - have sold like hot cakes.

CityDev, too, is not new to Sentosa Cove. The property giant headed by Kwek Leng Beng has teamed up with TID to develop a 264-unit condo in the upscale waterfront housing district on a landmark site gracing the entrance to the Marina Basin. The 15-storey condo - the highest allowed on Sentosa Cove - is expected to be marketed very soon, possibly this month with an average price touted to be $1,300 psf.

This is not the first time CityDev will be partnering Starwood here.

CityDev, Hong Leong Holdings and TID are developing a luxury hotel at Tomlinson Road that will be managed by Starwood under its upscale St Regis brand.

The expression of interest exercise for the Quayside Collection is said to have attracted seven to eight bids. Bidders are said to have included Pontiac Land group and hotel chain Marriott. The initial list of contenders was eventually narrowed down to CityDev and Lippo, sources say.