Genting Singapore's $238.2m bid for hotel site is 'excessive'

Its subisidiary Tamerton just won the contract.

According to Phillip Securities, Tamerton Pte Ltd, a wholly owned subsidiary of Genting Singapore, won a hotel site at Jurong Town Hall Road with winning bid of S$238.2 mil. The site has a land area of 0.9 ha and a potential gross floor area of about 19 ha.

Here's more from Phillip Securities:

The subsidiary’s bid was excessive relative to other bidders in the same tender as well as against bidders in previous hotel site tenders. GENS must be extremely keen to have the parcel of land. If not, the excessive bid is then a reflection of their unfamiliarity with the business.

Based on our assumptions, we do not expect earnings from the hotel project to be significant. EPS accretive is non-material given the company’s large share base.

GENS’ bids were excessive relative to bidders in the same tender and against winning bids for previous tenders. Eg, the most recent bid for a hotel site located at Victoria Street/Jalan Sultan was at S$10,696.19 psm, 17% higher than Tamerton’s bid.

Yet, given the extremely large share base of 12 billion shares, the earnings from this hotel development is not expected to be significant.

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