Genting SP

Genting SP: Resorts World Spore put a record $1,167/psf ppr or $238.2m bid for a 18.957 sm gfa hotel site at Jurong Lake District, significantly higher than mkt expectations of $650-830 psf. The site attracted 11 bids from major players. The second highest bid came in at $204.8m or $1,004/psf ppr. This is the first hotel site in the Jurong Lake District, an area undergoing transformation and to be developed into Spore’s biggest lakeside destination for business and leisure outside the city centre. The hotel is est to have 510 rooms and roughly 3,150 sm of commercial space. Breakeven cost is est at $550-580k per room. Property consultants noted RWS's foray into Jurong is a strategic move aimed at capturing the Msian visitors mkt, given the site’s proximity to the Second Link to Msia. The mass mkt may also prefer a lower 3-4 star accommodation. Deutsche estimates the entire project may cost roughly $320-330, which can be easily funded given GENS large cash reserves. RWS currently owns 6 hotels with 1,500 rooms all in Sentosa. Deutsche keeps the stock at Hold with TP $1.21.