More Than a Redevelopment: Royal Group’s Strategic Shift Towards Hospitality
Royal Group’s decision to redevelop 11 Claymore Road into a long-stay serviced apartment is far more than a routine redevelopment exercise. It reflects a broader strategic repositioning of the group’s real estate portfolio towards recurring hospitality income rather than one-off development profits. While the freehold Orchard Road site could have been redeveloped into luxury condominiums for sale, Royal Group has instead chosen to retain ownership and operate the asset as a long-term investment. When viewed alongside the company’s existing portfolio of hotels, commercial properties, and recent redevelopment projects, the decision reveals a deliberate strategy to increase its exposure to Singapore’s growing hospitality sector while preserving ownership of prime freehold assets.
The Project Reflects a Long-Term Investment Mindset
Royal Group acquired the freehold 17,974 sq ft site at 11 Claymore Road for approximately S$75 million in 2025. Including construction, land betterment charges, professional fees, financing costs, and stamp duties, the total investment is expected to range from S$185 million to S$190 million.
Initially, the company intended to develop a hotel on the site. However, because the land is zoned for residential use, the Urban Redevelopment Authority (URA) did not support a conventional hotel proposal. Instead, URA proposed two alternatives: a private residential development for sale or a long-stay serviced apartment under its SA2 planning framework, which requires a minimum stay of three months.
Royal Group ultimately selected the serviced apartment option. The revised proposal consists of approximately 102 apartments spread across an 18-storey building. Each apartment will measure approximately 452 to 484 square feet and feature two bedrooms, two bathrooms, living and dining areas, a kitchenette, and a balcony. Residents will also enjoy facilities such as a swimming pool, gymnasium, wellness amenities, communal terraces and hotel-style services managed by a professional operator. The company is targeting monthly rents of between S$7,500 and S$8,000, positioning the development towards expatriates, corporate executives, consultants, embassy personnel and other professionals requiring accommodation for several months.
Why Royal Group Chose Not to Build Luxury Condominiums
Given the prestigious Orchard Road address, many developers would have opted to build luxury residential units for sale, allowing them to recover their investment quickly while realising substantial development profits. Royal Group’s decision to retain ownership suggests it is prioritising long-term asset ownership over short-term capital gains.
Unlike traditional residential developers whose objective is to sell units upon completion, Royal Group appears to be treating the Claymore Road project as a permanent investment asset capable of generating recurring rental income over many decades. This approach allows the company to benefit from both stable cash flow and the long-term appreciation of one of Singapore’s rare freehold properties on Orchard Road. Rather than monetising the land immediately through residential sales, Royal Group is effectively transforming the property into an income-producing asset that can remain within the family’s investment portfolio for generations.
The Conversion Fits Royal Group’s Broader Hospitality Expansion
The Claymore Road redevelopment is not an isolated project but rather the latest addition to Royal Group’s steadily expanding hospitality portfolio. Over the years, the group has assembled a substantial collection of hotels, serviced accommodation and commercial properties across Singapore.
Among its hospitality assets are SO/ Singapore, Sofitel Singapore Sentosa Resort & Spa, Mercure ICON Singapore City Centre (through ownership interests), Hotel Royal, and Hotel Chancellor @ Orchard. The group is also developing Casa Mett, a new luxury hotel at the site of the former Ming Arcade along Cuscaden Road. Beyond hospitality, Royal Group owns several commercial developments, including Royal Square at Novena, various office buildings and retail properties.
Viewed collectively, these investments reveal a consistent strategy. Rather than relying heavily on profits from residential development, Royal Group has steadily increased its exposure to hospitality assets that generate recurring operating income. The addition of another premium serviced apartment on Orchard Road complements the existing portfolio and further strengthens its presence in Singapore’s hospitality market.
The Redevelopment of Ming Arcade Provides an Important Clue
Perhaps the strongest indication of Royal Group’s strategy comes from its redevelopment of the former Ming Arcade. After acquiring the property, the company could have pursued another luxury residential project given its prime location near Orchard Road. Instead, it chose to transform the site into Casa Mett, a luxury hospitality development expected to commence operations next year.
The decision mirrors the Claymore Road redevelopment almost perfectly. In both cases, Royal Group chose to preserve ownership of strategically located freehold assets while converting them into hospitality investments capable of generating long-term recurring income. Rather than treating Orchard Road properties as assets to be sold, the company appears to be assembling a high-quality hospitality portfolio centred around one of Singapore’s most valuable districts.
Why Long-Stay Serviced Apartments Are Becoming Increasingly Attractive
The timing of the project also reflects broader structural changes within Singapore’s accommodation market. Demand for long-stay accommodation has increased significantly over recent years due to the continued expansion of multinational corporations, technology firms, private equity funds, family offices and regional headquarters establishing operations in Singapore.
Many foreign professionals relocate to Singapore for projects lasting between three and six months. Traditional hotels become prohibitively expensive for stays of this duration, while most residential landlords require minimum lease periods of at least one year. The SA2 serviced apartment model fills this gap by providing professionally managed accommodation with hotel services while satisfying regulatory requirements for minimum stay periods.
By targeting this segment, Royal Group is positioning itself within an area of sustained demand rather than competing directly with conventional hotels or private residential leasing. The Orchard Road location, proximity to embassies, medical facilities, and Singapore’s financial districts further enhances the development’s attractiveness to corporate tenants.
Orchard Road Is Evolving Beyond Retail
The Claymore Road redevelopment also reflects the continuing transformation of Orchard Road itself. Historically recognised primarily as Singapore’s premier shopping district, Orchard has gradually evolved into a much broader mixed-use precinct comprising luxury hotels, premium residences, medical tourism facilities, embassies, corporate offices and lifestyle destinations.
Major developments such as Pan Pacific Orchard, the proposed redevelopments of Tanglin Shopping Centre and Delfi Orchard, together with enhancement works throughout the Orchard precinct, are gradually reshaping the district into an integrated live-work-stay environment. Royal Group’s investment aligns closely with this broader urban transformation by introducing another hospitality asset that complements the neighbourhood’s evolving character.
Hospitality Provides More Stable Recurring Income
Another reason behind the conversion lies in the changing investment preferences of long-term property owners. Unlike listed developers that often prioritise development margins and capital recycling, privately owned property groups frequently place greater emphasis on preserving wealth through stable recurring income.
A fully occupied serviced apartment development in Orchard Road can generate predictable rental cash flows while simultaneously benefiting from the appreciation of the underlying freehold land. Although operational costs will naturally reduce net returns, the long-term stability of recurring hospitality income can be highly attractive compared to the cyclical nature of residential development profits.
For a family-owned property group such as Royal Group, this approach supports long-term balance sheet strength while preserving strategic control over some of Singapore’s most valuable real estate.
Why Royal Group Chose Serviced Apartments Instead of Another Hotel
Although Royal Group originally intended to develop a hotel, the serviced apartment model arguably offers several operational advantages. Hotels depend heavily on tourism, daily occupancy and seasonal travel demand, making revenues more volatile during economic downturns or travel disruptions.
Long-stay serviced apartments typically experience lower tenant turnover, longer average occupancy periods and stronger relationships with corporate clients. Marketing costs are generally lower, while recurring leases provide more predictable cash flows. By targeting professionals who stay for several months rather than transient tourists, Royal Group can achieve a more resilient operating model while still benefiting from hospitality demand.
The Bigger Picture
Viewed in isolation, the redevelopment of 11 Claymore Road may appear to be simply another Orchard Road project. However, when considered alongside Royal Group’s expanding hospitality portfolio, the redevelopment of Ming Arcade into Casa Mett and the company’s long-term ownership philosophy, a much clearer strategy emerges.
Rather than monetising prime freehold land through residential sales, Royal Group is steadily building a portfolio of hospitality assets that generate recurring income while preserving ownership of scarce Orchard Road properties. The decision reflects confidence in the long-term demand for premium serviced accommodation and demonstrates a preference for stable operating income over short-term development gains.
As Singapore continues to strengthen its position as a regional financial, business and wealth management hub, demand for professionally managed long-stay accommodation is likely to remain resilient. Royal Group’s latest investment suggests the company believes the future value of Orchard Road lies not only in luxury residential development but increasingly in hospitality assets that combine prime real estate ownership with sustainable recurring income.
Disclaimer: This article is intended for informational and educational purposes only and reflects the author’s analysis and interpretation of publicly available information, announcements and market data as of the date of publication. Any opinions, projections or forward-looking statements regarding Royal Group’s strategy, redevelopment plans or the hospitality market are based on current information and should not be construed as confirmed facts or investment advice. Readers should conduct their own independent research and seek professional advice before making any investment or property-related decisions. Future plans, regulatory approvals and market conditions may change without notice.
Article contributed by Jerry Wong.
Jerry Wong is a realtor at Propnex Realty, bringing a rich background in interior and lighting design to his work. He loves exploring diverse spaces and observing the transformative power of real estate. Beyond his professional role, Jerry finds his greatest fulfillment in connecting people with the right properties, gaining immense satisfaction from helping clients achieve their dreams.
