Ascott Reit gets go-ahead to redevelop Somerset Grand Cairnhill

URA permitted the Ascott Reit to turn the property into an integrated hotel and residential site.

The Manager of Ascott Residence Trust (Ascott Reit), Ascott Residence Trust Management Limited (ARTML), wishes to announce that the Urban Redevelopment Authority (URA) has granted provisional Outline Planning Permission (OPP) for the redevelopment of Somerset Grand Cairnhill Singapore, into an integrated hotel and residential development.

The OPP is granted on the following key terms and conditions amongst others:

• rezoning of the site from Residential to Commercial and Residential use; 
• maximum allowable gross floor area (GFA) of about 43,300 sqm comprising minimum 40% hotel and hotel related uses and 60% residential use; 
• the retention of the Al-Falah Mosque in the development; and 
• payment of development charge, if any, and land/differential premium.

The existing lease of Somerset Grand Cairnhill expires in 2082 and the Manager will look into the possibility of an extension of the existing lease as part of the evaluation of the OPP.

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% of Ascott Reit’s deposited property. Ascott Reit’s total deposited property as at 30 June 2011 is about S$2.8 billion, according to an Ascott Reit report.

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.

Mr Chong Kee Hiong, chief executive officer of ARTML, said, “We are pleased to have obtained provisional Outline Planning Permission to redevelop Somerset Grand Cairnhill. This is part of our efforts to constantly evaluate Ascott Reit’s portfolio for potential enhancements to optimise value. In evaluating the options for value enhancement, the Manager’s key considerations would be the retention of Ascott Reit’s presence in the Orchard Road area in Singapore, the continued operations of the Al-Falah Mosque in the development and the potential yield accretion to the portfolio of any proposed redevelopment.”