Singapore firm plans hotel and residential project in US

 

The mixed-use project will be jointly developed with US real estate developer Urban Commons in a 50:50 joint venture, Chiwayland announced yesterday.

 

It added that the move comes at a time when the US residential property market is "gaining traction coupled with supply shortage".

 

Chiwayland country director Zhang Gaowei said: "We are entering the US property market with an attractive project, amid positive signs of the market coming off a low base. The development is located in a key hub of LA, also one of the largest and most vibrant urban centres of the US."

 

Citing data from the Association of Foreign Investors in Real Estate, the company said that average home prices in Los Angeles had climbed 10 per cent over the last year to US$548 per square foot, and are expected to rise further this year.

 

It plans to develop 60 residential units and a 250-room hotel on the site in Mid-Wilshire, the city's most densely populated area due to its 24-hour entertainment scene and cultural diversity, it added.The project, due to be completed in 2019, is a 10-minute drive from the central business district of Los Angeles, and south of Hollywood.

 

Chiwayland said the hotel - to be flagged with a brand under Marriott or Starwood - would be part of the company's property investment portfolio to offer recurring income.

 

"Based on prevailing market rates of similar hotels around the vicinity, average room rates start at US$249 per night, with an average occupancy rate of 75.8 per cent as compared with the national average of 65.6 per cent," the firm noted.

 

The development site - now occupied by a post office and carpark - has a plot ratio of three, and Chiwayland intends to have it bumped up to six, with a total gross floor area (GFA) of 207,132 sq ft. It said 40 per cent of the total GFA will be allocated to its residential component.

 

The firm is confident that its request to increase the plot ratio will receive approval within the next 12 months, citing other approvals awarded on several plots nearby.

 

Chiwayland executive chairman and chief executive Qian Jianrong said the US property market is "mature and stable, and undergirded with a strong legal framework with good transparency" - characteristics the firm seeks when expanding overseas.

 

Chiwayland's portfolio of properties now spans China, Australia and the US. The company said it hopes to grow its international footprint with planned expansion in North America, western Europe and Asia, subject to an extraordinary general meeting to be held next month.

 

It anticipates contributions from overseas projects to account for at least 50 per cent of its revenue within five years.

 

Chiwayland's shares closed 0.7 cents or 5.47 per cent higher at 13.5 cents yesterday before the announcement of the Los Angeles project.