Singapore's pipeline remains strong despite development crackdown

Singapore is cracking down on hotel development. According to Channel News Asia, the Urban Redevelopment Authority will reject proposals to build new hotels, boarding houses and backpackers' hostels on sites that are not zoned for hotel use.

In recent years, the URA has received more applications for these developments on sites that are not zoned for hotel use. The authority said the new regulation will be effective immediately. These proposals have included to change the type of use a site is zoned for - from commercial to hotel use, for example. 

"The authority said accommodation for visitors to Singapore is generally found in commercial areas, but such uses should not dominate and displace other commercial activities," the article reports. "This applies to certain locations in areas like Outram, Rochor, Downtown Core and the Singapore River." The same applies to places outside the central area. 

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For proposals in other parts of the central area, the URA will look at each case individually to determine its intentions and how it will impact traffic. For existing approved hotels and boarding houses on sites that are properly zoned, proposed expansion plans are subject to evaluation.

"For existing approved visitors' accommodation who have temporary permission to use a site for their activities, further renewal of the permission will only be granted to tenants if they have not caused any adverse traffic impact and disamenity to their neighbors," the article continues. 

That said, things do not seem to be slowing down for Singapore's hotel development. Singapore Business Review is reporting that 60,000 hotel rooms are expected in 2015. "This is a notable increase from the 54,962 rooms recorded at the end of 2013," the article says. "[A report by Maybank Kim Eng] further estimates that there will be more than 65,000 hotel rooms in Singapore by 2018."

At the end of 2013, Singapore had 373 hotels. Hotel capital are values expected to stay resilient. "Robust transactions suggest strong underlying strength. According to CBRE, the investment market for Singapore hotels remains strong," the report says. 

Buyers, which previously were made up of mostly domestic interest, now include those from Japan and China. Singapore is one of the most sought-after markets for hotel investment in Asia.

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