Singapore is considering the development of a new Meetings, Incentives, Conferences, and Exhibitions (MICE) hub in the Orchard area, according to a recent report. The Orchard HPL redevelopment site is a strong contender for this initiative, which is part of the Singapore Tourism Board’s (STB) strategy to increase MICE tourist receipts to 10% by 2040. This move is expected to attract more short-stay business travellers, who currently make up about 37% of the inbound market.
The potential transformation of the Orchard area could see older hotels, such as Orchard Hotel and Orchard Rendezvous Hotel, rejuvenated under the Strategic Development Incentive scheme. This initiative aims to revitalise the hospitality sector, which is poised to benefit from upcoming events like the Lady Gaga concert in May 2025, expected to stabilise hotel occupancy rates.
Singapore Real Estate Investment Trusts (S-REITs) are also showing promising returns, trading at forward yields of 6.7%. Notably, CapitaLand Ascott Trust (CLAS), CDL Hospitality Trusts (CDLHT), and Far East Hospitality Trust (FEHT) offer yields of approximately 7% or higher. The report highlights that historically, investors who bought at 0.8 times price-to-book ratios have seen positive returns within a year.
As macroeconomic uncertainties persist, investors are likely to adopt a conservative approach, favouring retail, industrial, and office sectors over hotels. However, the report suggests that value investors could find opportunities in Mapletree Pan Asia Commercial Trust (MPACT), FEHT, Sasseur REIT, and Frasers Logistics & Commercial Trust (FLT).
In summary, Singapore’s plans to develop a new MICE hub in Orchard could significantly boost the hospitality sector, whilst S-REITs continue to offer attractive investment opportunities amidst economic uncertainties.
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