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REFLECTING the strong sentiment in the Singapore hotel market, a state tender for a hotel site next to Robertson Quay Hotel yesterday attracted seven bids.

The top bid of $55.5 million came from Hong Kong's Park Hotel Group. This price is more than double the $25 million minimum price for the 99-year leasehold site on the reserve list.

'The price we paid reflects our confidence in the Singapore hotel market in the years to come,' Park Hotel director Allen Law told BT. Last year, the group bought Crown Hotel on Orchard Road. T

Park Hotel beat Far East Organization by 6.4 per cent to emerge as the top bidder for the plot, which is located at the corner of Unity Street and Clemenceau Avenue. The site has a view of the Singapore River.

Far East offered $52.18 million, marking the second time in a week that the local property heavyweight has been beaten by foreigners at a state land tender. Last week, Far East was defeated by just a 1.1 per cent margin by Australia's Lend Lease group, which emerged as the top bidder for the plum Somerset Central commercial site on Orchard Road.

Park Hotel unit ParkSing Property's $55.5 million top bid at yesterday's tender reflects a unit land price of $466 psf per plot ratio - which is 55 per cent higher than the $300 psf ppr fetched for a Bras Basah Road hotel plot next to Carlton Hotel in January 2005, property consultancy CB Richard Ellis observed.

Park Hotel plans to develop the 42,503 sq ft Unity Street site into a 350-room hotel at an all-in cost of about $125 million. This works out to nearly $360,000 per room and Mr Law said that the group is looking at a 5 per cent net yield, assuming an average daily room rate of $130.

Park Hotel plans to develop a stylish, boutique hotel along the lines of Starwood's W Hotels brand. There will be some food & beverage outlets to cater to the nightlife near the Singapore River area.

'We expect to open the hotel by end-2008 and we're targeting business travellers as well as foreign independent travellers, because of its location near the Singapore River,' said Mr Law. 'The new hotel will also oversee Clarke Quay and the CBD. Guests should be able to see the fireworks on National Day in the Marina Bay area.'

The other bidders at yesterday's tender were Hotel 81-linked CityView Development ($37 million); LaSalle Lao Singapore, representing the LaSalle Asia Opportunity Fund managed by LaSalle Investment Management ($34.6 million); Ho Bee Developments ($31.9 million); Republic Hotels & Resorts, part of Millennium & Copthorne Hotels plc ($29.1 million); and Yeoh Tiong Lay Construction ($29 million).

Mr Law said that Park Hotel hopes to bag another two to three hotel plots on the Government Land Sales programme.

He expects hotel room rates on the island, which are this year generally 20 per cent higher than last year, to rise at single-digit rates for the next few years.

The group is investing $80 million in Crown Hotel over the next three years, doubling the retail area to nearly 100,000 sq ft (housing five to seven luxury brand stores with Orchard Road frontage) as well as sprucing up the hotel.