The Resurgence of Billion Dollar Enbloc Deals?

Since the introduction of new property cooling measures in July, our collective sales market had slowed down considerably. But this week, I am getting excited with the spate of news in the enbloc market. During the week, 4 new collective sale tenders were announced. The most anticipated enbloc sale is the tender for Laguna Park that is about to be launched.

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Laguna Park – Launching collective sale tender @ S$1.48 bil asking price

Laguna Park owners are seeking for a mind-blowing S$1.48 bil from developers. This project is located in District 15, next to the upcoming Siglap MRT station. What is so unique about this site? This development offers panoramic sea view, is located near to educational institutions and has good transportation/road network connectivity. Laguna Park has a huge land area of 669,486 sq ft and has a remaining leasehold of around 58 years.

A developer will have to pay a differential premium of S$453.5 mil and lease top-up of S$416 mil to the Singapore government to redevelop the site. Hence, the overall land cost will be around S$2.35 bil or S$1,253 psf ppr, before factoring the newly-introduced 5% non-remissible ABSD and 4% buyer’s stamp duty that are upfront costs to the developer.

Fernwood Towers, a freehold condo near Laguna Park, has launched its collective sale tender on 12th Sep.  Fernwood Towers has a land area of 148,963 sq ft, with a higher plot ratio of 3.0. Owners at Fernwood Towers are seeking S$688 mil or S$1,540 psf ppr. Comparing with Laguna Park, Fernwood Towers is less attractive as it is located further away from the future Siglap MRT station. Its sea view will also be partially blocked once Seaside Residences is completed. The only plus point for this site would probably be its freehold status.

As these two collective sales tender of significant size prepare for their tender launches, the tender for S$1.1 bil collective sale of Horizon Towers in the prime District 9 closed on 12th Sep 2018 without getting a buyer.  The Horizon Towers collective sale is one of the casualties resulting from the latest round of cooling measures as developers have turned more defensive towards acquiring new development sites.

Hence, collective sales of significant sizes, such as Laguna Park and Fernwood Towers, are likely to face challenges in securing buyers.

But the launch of Seaside Residences Phase 3 on 29th September might have some impact on the collective sale tenders for Laguna Park and Fernwood Towers. During its Phase 2 launch, Seaside Residences achieved an average selling price of S$1,933 psf. However, as reported in the news, the estimated breakeven price for Laguna Park is around S$1,800 psf to S$1,900 psf. This means that the profit margin is thin and it might not be sufficient to compensate for the higher risks that developers face now.

Nonetheless, the response from buyers will an important factor that developers will consider when evaluating a bid for Laguna Park and Fernwood Towers. A strong demand for the Phase 3 units at Seaside Residences should help to improve the odds of a successful collective sales of Laguna Park and Fernwood Towers.

Owners at Laguna Park and Fernwood Towers should be eagerly anticipating the launch of Seaside Residences Phase 3.

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First GLS tender closing since new cooling measures in July. Is the situation as bad as what market watchers think?

This week, there were 3 government land sales tenders closing and these were the first batch of tenders that closed since the government announced the new cooling measures in July.

How were the responses to these tenders?

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Condo site at Jalan Jurong Kechil

There were only 3 tender bids received for the site at Jalan Jurong Kechil and this is one of the lowest in recent times. The low number of bids received reflect the general pessimism amongst Singapore property developers. Some developers may have decided to sit out of the land tenders, in view of the weakened market sentiments.

The highest price of S$1,002 psf ppr from CSC Land and COHL Singapore seems aggressive. Earlier this year, Kismis View, a nearby 99-year condominium development, was collectively sold to Roxy Pacific and Tong Eng Group for S$941 psf ppr. The bid from CSC Land was 6.5% higher than the price paid for Kismis View.

There was a wide disparity in the tender bids submitted. Second highest bidder – Hao Yuan Investment submitted a bid of S$764 psf ppr, which was 23.8% lower than CSC Land’s bid. The lowest bid came from Sim Lian Holdings, which offered S$606 psf ppr for the site (39.5% lower than CSC Land’s bid).

 

Condo site at Dairy Farm Road

The highest tender price of S$830 psf ppr from United Engineers is 22.2% lower than the S$1,067 psf ppr that Hong Leong Group recently paid for a nearby GLS site at Hillview Rise but the large price differential is likely to be a reflection of the differences in selling prices in the 2 area.

The Dairy Farm Road site is located further away from the Hillview MRT Station and some of the nearby condominiums in the area include Tree House, Foresque Residences and Eco Sanctuary. A 2-bedroom 797 sq ft high floor unit at Tree House was recently transacted at S$855,000 or S$1,073 psf.

The Hillview Rise site is located nearer to the Hillview MRT Station, with supporting retail amenities nearby – HillV2 mall. Some of the nearby condominiums in the area include The Hillier and Kingsford Hillview Peak. At Kingsford Hillview Peak, a 2-bedroom 829 sq ft high floor unit was recently transacted at S$1.2 mil or S$1,448 psf.

The difference in pricing implies that residential properties on the Hillview side could potentially sell at a premium of 30% to 40% above the prices of properties on the Dairy Farm Road/Petir Road side. This is a likely reason for the wide difference in the tender prices between the GLS sites at Dairy Farm Road and Hillview Rise.

The tender bid submitted by CSC Land for the Dairy Farm Road site also supports this view. CSC Land had also participated in the earlier tender for the Hillview Rise site, submitted a bid of S$935 psf ppr for the site. In comparison, the tender bid of S$804 psf ppr submitted by CSC Land for the Dairy Farm Road site was 14% lower than its bid for the Hillview Rise site. CSC Land has continued to bid aggressively for land since the recent cooling measures. Hence, the lower bid for Hillview Rise site is unlikely to be a reflection of the group’s conservatism towards land acquisition, but more likely to be a reflection of the weaker attributes of the site in comparison to the Hillview Rise site.

This government land sales officially marks the return of United Engineers to the residential development scene in Singapore. The last residential development by United Engineers was in 2012 when it launched 8 Riversuites in District 12.

It is evident that sentiments among property developers have weakened and this is reflected in the fewer number of tender bids received. Prior to the introduction of cooling measures, there are usually around 10 bids received for GLS tenders on average. For this Dairy Farm Road land tender, there were only 5 bids. Some developers may have decided to sit out of the land tenders, in view of the weakened market sentiments.

 

Executive Condominium site at Canberra Link

The highest tender price of S$558 psf ppr from Hoi Hup & Sunway is 4.3% lower than the record price of S$583 psf ppr paid by CDL and TID for the Sumang Walk EC site. Nonetheless, the tender price for the Canberra Link EC site is still very aggressive if we take into consideration the differences in executive condominium pricing in the 2 areas. Sumang Walk EC site is located in the North-east region and Canberra Link EC site is located in the North region.

In the North-east region, Rivercove Residences, an Executive Condominium development launched in April 2018 (another development by Hoi Hup & Sunway), achieved an average selling price of S$975 psf. In the North Region, Parc Life, an Executive Condominium developed by Frasers, was selling at an average selling price of S$850 psf this year.

Hence, the lower land price for the EC site at Canberra Link reflects the discount in the average selling price of executive condominium in the North, compared to the North-east region.

At the tender price of S$558 psf ppr, the estimated breakeven selling price of the development will be around S$900 to S$950 psf and the expected launch price should be around S$1,000 psf to S$1,050 psf. This is a 10.5% to 17.6% increase in the selling price of executive condominium in the area (using Parc Life as a reference).

Demand for this site is relatively strong in comparison to the number of bids received for the other 2 residential sites, but it was not as strong if we compare it to the last EC tender for Sumang Walk site. A total of 9 bids were received for the Canberra Link EC site, less than the 17 bids for the Sumang Walk site. All 9 tenderers for the Canberra Link EC site participated in the Sumang Walk EC site tender back in Feb 2018.

However, several developers and consortiums that submitted bids for the Sumang Walk EC site were missing in this Canberra Link EC tender – 1) Yanlord/Soilbuild consortium; 2) Sing Holdings/Far East Consortium/Koh Brothers; 3) Frasers Property/Keong Hong; 4) Nanshan Group; 5) GuocoLand; 6) Amara/Santarli/Kay Lim; 7) MCL Land; and 8) Ho Bee Land. This could be attributable to a more conservative land acquisition approach by these developers after the July cooling measures. It is also possible that some of these developers might have preferred to tender for the other EC site at Anchorvale Crescent instead. Tender for the Anchorvale Crescent EC site will be closing on 14th Sep.

 

What does the latest round of GLS tender tell us?

Firstly, the absence of several property developers which had been active in GLS tenders prior to cooling measures, as well as the decrease in the number of bids reflect the general cautious sentiments among most property developers in replenishing their land bank. No surprise here.

But this is unlikely to be a doomsday scenario yet. Some developers, especially those that had not replenished their landbank, may view this as an opportunity for them to acquire new sites at more reasonable prices. Both CSC Land and United Engineers had not acquired sites during the 2017/18 collective sale cycle and both companies managed to secure new development in the absence of fierce competition. This will sustain some interests in land acquisition activities but developers are likely to remain conservative in their offer prices for land as they factor in higher development risks when bidding.

Executive condominium seems to be the only bright spot in the residential property market. EC sites continue to be highly sought-after by developers. The existing stock of EC units in the market is almost fully sold. With the recent property cooling measures, executive condominium sites are looking even more attractive for developers. But, with the next round of EC launches likely to hit prices of S$1,000 psf to S$1,100 psf, which is close to some of the new condo launches, I’m just wondering how sustainable this will be.

Who knows, maybe the Government may be targeting the EC market next?

Collective Sale Activities Hint At A Shift in Landbanking Strategy

The collective sale market in Singapore continues to perform strongly. Property developers snatched up 26 sites worth S$8.5 bil for the year to date. This has already exceeded the collective sale transactions for the entire 2017. There is one noticeable fundamental shift in developers’ land banking strategy. There is now a shift of preference away from suburban sites towards freehold sites in prime districts. Redevelopment of all the collective sale sites will yield close to 22,000 new units, but this will not cause an oversupply situation yet as these units will enter the market over a period of time within the next 1 to 2 years.

This insight first appeared on Singapore Investment Research and SmartKarma – a global independent research network .

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The collective sale market in Singapore continues to perform strongly. For the year to date, property developers have snatched up 26 sites worth S$8.5 bil and this has already exceeded the collective sale transactions for the entire 2017.

This insight provides a review of the activities in the collective sale market in Singapore for the year to date:

Collective Sales Data at a Glance
  • 27 collective sale transactions were concluded for the year to date, surpassing the 26 transactions done in the entire year of 2017
  • The combined value of the collective sale transactions for the year to date was S$8.5 bil, 5% higher than the combined value of all collective sale transactions in 2017
  • Average value per transaction for the year to date was S$315 mil per transaction, similar to that in 2017 (S$311 mil)
  • There were 2,564 en-bloc sellers who benefitted from collective sales for the year to date, 22% lower than the number of en-bloc sellers in 2017. This was due to the concentration of collective sale transactions in the higher value prime properties in 2018
  • Out of the 27 collective sales transaction for the year to date, 17 of them are in the prime districts, 9 of them are in the city fringe area and 1 of them is an industrial building. No suburban collective sales were done for the year to date. This is in stark contrast to the situation in 2017, when 9 out of the 26 collective sale transactions were suburban condominiums, accounting for 41% of the total collective sale transaction value in 2017
Districts with Most Collective Sale Transactions
  • Redevelopment sites in prime District 10 were the most sought-after sites by developers for the year to date, with 8 out 27 collective sale transactions involved condominiums in District 10 and total transaction value of condominiums sold en-bloc in District 10 was S$2.26 bil. This was in stark contrast to the situation in 2017, when redevelopment sites in the suburban District 19 were the most popular among developers.
  • Freehold estates are back in favor, with 25 out of the 27 transactions involving freehold/999-year leasehold estates. There are 2 possible explanations for this phenomenon. Firstly, a developer that acquires a leasehold property for redevelopment is subject to the payment of lease top-up premium that is dependent on the Development Charge set by the government, which is revised semi-annually. The long collective sale process may expose the developer to an upward revision in Development Charge and potentially higher land cost. Buying a freehold redevelopment site would remove this element of uncertainty in developers’ profit planning. The second reason relates to the current trend of land-banking of prime land by developers. The target market of these high-end redevelopments is likely to be the HNWIs in the region. For these buyers, purchase considerations are more driven by the unique attributes of a development and they are less price sensitive. Hence, a freehold prime development might be more appealing to such buyers, instead of a leasehold property.
  • The average premium over reserve price paid by developers for the year to date has fallen to +5%. In 2017, developers paid a higher average premium of +13% above the reserve price. Declining premiums could be a case of higher reserve prices set by sellers and greater supply of redevelopment sites available for collective sale this year.
  • The 26 residential developments collectively sold for the year to date could potentially yield up to 8,650 new units for future launch, of which 3,669 units (42.4%) were in the prime district and 4,982 units (57.6%) were in the city fringe. No new supply (via collective sale) was added to the suburban area for the year to date.
  • Out of the 26 collective sale transaction for the year to date, 13 of these sites were acquired by consortiums of developers. These sites tend to be the bigger sites with higher transaction value. By forming consortiums, developers can mitigate their risk exposure in a single large-scale development project.

There has been a fundamental shift in developers’ land replenishing strategy in 2018. Developers have shifted their focus from the mass market segment to the luxury property segment and building up their development landbank in the prime districts. This comes as no surprise as new launches of luxury properties in Singapore (such as New Futura) have done surprisingly well despite the high price quantum and there is growing evidence of foreign buyer returning to the Singapore property market.

Despite the surge in collective sale activities in the prime districts, potential new supply in the prime district does not look excessive at this stage, with an estimated 4,405 units that could potentially enter the supply pipeline, probably a year later. The actual number of units could be lesser as it is likely that developers may build bigger size luxury units for sale.

In the mass market segment, potential new supply from collective sale transactions does not look excessive as well, with an estimated 6,946 units that could potentially enter the supply pipeline. Developers will start launching some of these units as soon as within the next 1 to 2 months. According to public announcements, Oxley Holdings Ltd (OHL SP) is planning to launch Rio Casa and Serangoon Ville redevelopment in 1H 2018.

Most of the future supply from collective sale transactions are in the City Fringe area, with an estimated 10,480 units that could potentially enter the supply pipeline. These developments tend to be in well-established mature estates that are highly sought-after by buyers.

Potential Supply of New Units for Future Launch

In total, the supply of new units from collective sale sites is estimated to be around 21,830 units. This is subject to change, depending on the final submitted plans and approvals from authorities. This new supply will enter the market in a staggered manner, depending on the speed of getting Strata Title Board’s approval for the collective sale transaction and relevant authorities’ approvals for redevelopment.

New Launch Review: The Garden Residences vs Affinity at Serangoon – Battle of the Northeast Titans

The property fever in the North-eastern part of Singapore is rising. Two big residential developments in District 19 – The Garden Residences and Affinity at Serangoon are launching at the same time. If you are still undecided on which new project, fret not, as SPK is here to help the readers with my new launch review.

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Location, Location, Location

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The Garden Residences and Affinity at Serangoon are located within close proximity to each other. The Location of The Garden Residences is closer to the Serangoon Garden area and the development is designed in such a way that a majority of the units get to enjoy the unblock landed view looking towards the Serangoon Garden area.

Affinity at Serangoon is located to the East of The Garden Residences, on the site of the former HUDC – Serangoon Ville site. The development is on an elevated piece of land and residents get to enjoy unblock landed view towards the East and South of the development.

In terms of accessibility, Garden Residences is located further away from the main road – Yio Chu Kang Road. The nearest bus-stop that residents at Garden Residences can go to is the one along Serangoon North Ave 1, which only has a feeder bus – 315 that goes to Serangoon Interchange. At Affinity, residents have access to more bus services via the bus stop along Yio Chu Kang Road on the Eastern boundary of the development.

Project Summary

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If you would like to get a unit in the area, but not sure which development and unit type to choose, the comparisons that I have done below should help you make a better-informed decision, hopefully!

The 1-Bedroom Comparison

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  • Layout of the 1-Bedrooms at Garden Residences and Affinity are similar, just like any other typical 1-BR units in the market today
  • The size of a typical 1-Bedroom at Affinity is 463 sf, slightly bigger in size than that at Garden Residences, which is 452 sf
  • At Affinity, the 1-Bedroom units are distributed across all 7 high-rise blocks in the development, whereas at Garden Residences, the 1-Bedroom units are all contained within a single block – Blk 1 within the development
  • DESIGN CONSIDERATION: Buyers should look out for the following key differences in the design:
    • A/C Ledge: 1-BR units at Garden Residences have bigger A/C ledge than those at Affinity.
    • Balcony: On the other hand, 1-BR units at Affinity have bigger balconies. On a lesser-of-two-evils comparison, having a bigger balcony would probably be a better deal than having a bigger A/C ledge.
    • Main Entrance: Garden Residences has a better main entrance design. The developer has allocated space on the right side of the entrance to allow buyers to fit in a full-height storage cabinet and the open kitchen is recessed and partially kept out of sight from the main door.
    • Master Bedroom: Garden Residences appears to have a wider Master Bedroom space than Affinity.
    • Living/Dining: On the other hand, Affinity seems to have a bigger living and dining area than Garden Residences. Trade-off between having a bigger living area or MBR, something for buyers to decide.
  • PRICING:
    • Garden Residences: Indicative pricing for 1-Bedroom units starts from S$788,000 or approximately S$1,750 psf
    • Affinity: Indicative pricing for 1-Bedroom units starts from S$738,000 or approximately S$1,600 psf

SPK’s Verdict – Most of the time, during my review of 1-Bedroom units, layout efficiency is an important criteria because, given the very small area, a poorly design unit may result in wastage of precious space and amplify the small, crampy space. On the hand, a well-design unit will create a visual effect that makes the unit looks bigger in comparison to a poor design unit of the same size.

From a design perspective, the 1-Bedroom units at Garden Residences seems to be better designed. Considerations were given to space planning that caters to the needs of occupants living in the unit, such as the design of the entrance & kitchen area and MBR space.

But from a pricing and investment strategy perspective, the 1-Bedroom units at Affinity seems to be better choice for investors. Pure simple math – Getting a bigger area for cheaper price. Buyers at Affinity are effectively paying close to a 9% discount in comparison to the 1-Bedroom units at Garden Residences. For a projected yield of 3%, a unit at Garden Residences will need to be rented out at close to S$2,000 a month, but buyers of 1-BR at Affinity will only need to rent at S$1,850 per month to achieve the same yield. Hence, buyers at Affinity can always offer tenants at lower rental rates than those units at Garden Residences, without compromising their yields and this should make it easier for a buyer at Affinity to secure a tenant.

 

The 1-Bedroom+Study Comparison

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  • Layout of the 1-Bedroom+Study at Garden Residences and Affinity are similar.
  • The size of a typical 1-Bedroom+Study at Affinity is 538 sf, slightly bigger in size than that at Garden Residences, which is 517 sf.
  • Affinity also offers a “premium” 1-Bedroom+Study layout with size of 603 sf. This layout comes with a bigger study room that could accommodate a queen size bed. This layout is comparable to a 2-Bedroom compact unit.
  • At Affinity, the 1-Bedroom+Study units are distributed across all 5 high-rise blocks in the development, whereas at Garden Residences, the 1-Bedroom+Study units are all contained within a single block – Blk 1 within the development.
  • DESIGN CONSIDERATION: Buyers should look out for the following key differences in the design:
    • A/C Ledge: 1-BR+S units at Garden Residences have bigger A/C ledge than those at Affinity.
    • Balcony: 1-BR+S units at Garden Residences also have bigger balcony than those at Affinity.
    • Master Bedroom: Garden Residences appears to have a wider Master Bedroom space than Affinity.
    • Living/Dining: On the other hand, Affinity seems to have a bigger living and dining area than Garden Residences. Trade-off between having a bigger living area or MBR, something for buyers to decide.
    • Toilet Access: 1-BR+S units at both Garden Residences and Affinity come with dual access doors and one of the access is from master bedroom. An important difference between the 2 layouts is the 2nd toilet access. At Garden Residences, the 2nd toilet access is from the study area. As visitors are more likely to access the toilet via the door in the study area, this makes it inconvenient for the owner to enclose the study area and make it into a second room. But at Affinity, the 2nd toilet access is from the living/dining area. Hence, a buyer can enclose the study area to make it into a small room, without affecting access to toilet.
  • PRICING:
    • Garden Residences: Indicative pricing for 1-Bedroom+Study units starts from S$898,000 or approximately S$1,740 psf.
    • Affinity: Indicative pricing for 1-Bedroom+Study units starts from S$848,000 or approximately S$1,580 psf.

SPK’s Verdict – For the 1-Bedroom+Study units, the verdict is obvious. In terms of design, 1-BR+S units at Affinity are more efficiently designed with more usable space. Moreover, buyers can have the flexibility of enclosing the study area to make it into a second room. In terms of pricing and size, 1-BR+S units at Affinity offers bigger unit size at cheaper price. Hence, for 1-BR+S units, I would choose to put my money on a unit at Affinity.

 

The 2-Bedroom Comparison

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  • The comparison between 2-bedroom units at Affinity and Garden Residences is an interesting and not-so-straightforward one! It probably reflects the shrewdness of one of the developers! Please read on…
  • At Garden Residences, the developer offers a compact 2-Bedroom layout with typical area of 614 sf. Layout is considered efficient. Buyer can consider enclosing the open kitchen and there are open space beside the main entrance that can be utilized to build storage area. Price for a 2-BR unit at Garden Residences starts from S$1.08 mil or S$1,760 psf.
  • At Affinity, a buyer looking for 2-bedroom unit would have more options to choose from:
    • For a budget-constraint buyer: There is a “premium” 1-Bedroom+Study unit at Affinity that the buyer can consider. The study area can be enclosed and fit a queen size bed, hence it can be considered as a proper room (without windows though). Typical size of this layout is 603 sf and if assume a psf rate of S$1,580 psf (the starting price for 1-BR+S), price of the “premium” 1-BR+Study will probably starts from S$950,000, which is significantly cheaper than the starting price of S$1.08 mil for a 2-BR at Garden Residences!
    • For a valuedriven buyer: Why pay S$1.08 mil for a 2-BR at Garden Residences when I can get a 2-BR+S for only S$988,000 at Affinity? Yes, you can get a bigger 2-BR+S unit with area of 624 sf at Affinity, and at a cheaper price too. This option will appeal to a value-driven buyer.
    • For someone looking for a more luxurious 2-BR: There is a premium 753 sf 2-Bedroom unit at Affinity that comes with a kitchen layout that allows buyer to enclose the space and 2 toilets within the unit. Price of a premium unit starts from S$1.12 mil, slightly higher than the S$1.08 mil starting price at Garden Residences. But on a psf basis, the premium 2-BR unit at Affinity is priced at S$1,490 psf, whilst Garden Residences’s 2-BR units are priced at S$1,760 psf

SPK’s VerdictOxley, the developer of Affinity, has thoughtfully considered the needs of different groups of buyers and has provided multiple options for buyers who are looking for 2-BR or similar units. The availability of choices at cheaper prices should appeal better to buyers. Hence, for 2-BR units, I would choose to put my money on a unit at Affinity.

 

The 2-Bedroom+Study Comparison

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  • At Garden Residences, the 2-Bedroom+Study unit has a typical size of 689 sf. It comes with a kitchen layout that allows the buyer to enclose the open kitchen. One design aspect of the layout which I couldn’t appreciate is the positioning of the common toilet door that faces the study area. Anyone who wants to use the common toilet would have to walk past the study area. Hence, the enclosing of the study area is not feasible in this design. I would have preferred to have the toilet door opening facing the open kitchen. Starting price of a 2-Bedroom+Study unit at Garden Residences is S$1.18 mil or S$1,710 psf.
  • Once again, Affinity offers more options to buyers who are looking for 2-BR+S units:
    • For a budget-constraint buyer: As mentioned in my 2-Bedroom comparison, there is a 2-BR+S compact that has a smaller typical size of 624 sf as compare to the 2-BR+S unit at Garden Residences. But this unit type at Affinity comes at a much lower starting price of S$988,000 as compared to the S$1.18 mil starting price at Garden Residences.
    • For someone looking for a more luxurious 2-BR+S: Affinity can offer buyers something different. There is a “premium” 2-Bedroom+Study unit with a typical size of 732 sf. This unit comes with a study area which buyer can enclose, a luxurious master bedroom size with a walk-in wardrobe. Assuming a psf rate of S$1,580 psf (same as compact 2-BR+S), the price of this premium 2-BR+S unit will start from S$1.16 mil, and this is comparable to the starting price of the 2-BR+S unit at Garden Residences.

SPK’s VerdictIn terms of design, the 2-BR+S units at Garden Residences are less appealing to me, simply because of the toilet door positioning. On the other hand, the 2-BR+S units at Affinity offer efficient layouts and there are different layout and size options to cater to different buyers’ appetite. Moreover, pricing of the 2-BR+S units at Affinity are cheaper in comparison to the units at Garden Residences. Hence, for 2-BR+S units, I would choose to put my money on a unit at Affinity.

 

The 3-Bedroom Comparison

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  • At Garden Residences, the 3-Bedroom unit has a typical size of 797 sf. It comes with a kitchen with a window that allows for open flame cooking and the layout allows the buyer to fully enclose the kitchen. Two of the bedrooms can fit in queen size beds whilst one of the bedrooms can only fit a single bed. There is no yard of utility room provided. Starting price of a 3-Bedroom unit at Garden Residences is S$1.38 mil or S$1,730 psf.
  • At Affinity, there are three types of 3-Bedroom units that are available for buyers to choose from:
    • For a budget-constraint buyer: Affinity offers a compact 3-BR layout with a size of 850 sf. This layout comes with an open kitchen and all 3 bedrooms can fit in queen size beds. Even though the size of the 3-BR compact layout at Affinity is bigger than the 3-BR unit at Garden Residences, the starting price of the 3-BR compact at Affinity is still cheaper than that at Garden Residences. Prices start from S$1.3 mil or S$1,530 psf.
    • For someone looking for a more luxurious 3-BR: Affinity also offers premium and deluxe 3-bedroom layouts for buyers to choose from. The premium 3-bedroom unit is designed with a kitchen with a window that allows for open flame cooking and the layout allows the buyer to fully enclose the kitchen. All 3 bedrooms can fit in queen size beds. In addition, the premium units come with a yard and utility room and the master bedroom has a luxurious size. The deluxe 3-bedroom unit offers a larger living and dining area that is suitable for buyers who like to host guests at their places, in addition to the design features that the premium layout offers.

SPK’s VerdictIt is a close call between the 3-BR at Garden Residences and compact 3-BR at Affinity. The 3-BR at Garden Residences will appeal to families who cook whereas for those don’t and like bigger rooms, Affinity will be a better option. From an investor’s point of view, having bigger bedroom sizes might be more appealing to them, since the bigger bedrooms can cater for more occupants in the unit. Moreover, pricing of the compact 3-BR units at Affinity are cheaper in comparison to the units at Garden Residences.

Affinity also offers premium and deluxe 3-BR units that are more luxurious than the ones offered at Garden Residences but these units are likely to be more expensive than the 3-BR at Garden Residences due to the big unit sizes. Nonetheless, Affinity offers a good variety of choices for 3-BR units for buyers to choose from. Hence, for 3-BR units, I would choose to put my money on a unit at Affinity.

 

The 3-Bedroom+Study Comparison

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  • 3-Bedroom+Study units are only available at Garden Residences. The unit type is efficiently designed, being able to accommodate 3 bedrooms and a study area within a floor area of 904 sf. All 3 bedrooms can fit in queen size beds. The study area can be enclosed to become a guest room/maid’s room/ utility room.

SPK’s VerdictAmong the different unit types at Garden Residences, the 3-BR+Study layout is one of the best within the development. At starting price of S$1.58 mil, I believe that it costs less than the deluxe and premium 3-Bedroom unit at Affinity, hence providing good value to buyers and investors.

 

The 4-Bedroom Comparison

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  • At Garden Residences, the 4-Bedroom units are designed to be one of the most luxurious unit types within the development. It comes with a private lift and lobby, a junior master bedroom with attached toilet and dry and wet kitchens. There are a total of 3 bathrooms within the 4-bedroom unit. The typical size of the 4-Bedroom unit at Garden Residences is 1,195 sf and prices start from S$2.18 mil or S$1,824 psf.
  • What are the options available at Affinity? You might be surprised to find out that the condominium blocks at Affinity do not offer 4-Bedroom units (except for the 5 penthouse units with 4 bedrooms)! But for buyers looking for a bigger unit, Affinity offers something different and unique – a 3-level strata landed unit that comes with 4 bedrooms and 2 private car park lots. Total area of a typical 4-BR strata landed unit is 2,045 sf, almost double the size of the 4-BR unit at Garden Residences but price starts from S$2.38 mil or S$1,160 psf.

SPK’s VerdictThe 4-BR units at Garden Residences are designed to be luxurious units. Prices are not cheap and the target market is likely to be an affluent group of buyers. However, it seems like Affinity has something of better value to offer to this group of affluent buyers – a strata landed 4-bedroom unit with 2 private car park lots and bigger unit area. On a psf basis, the strata landed units look like a bargain. Hence, for 4-BR units, I would choose to put my money on a strata-landed unit at Affinity.

 

The 4-Bedroom+Study Comparison

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  • Whilst the 4-Bedroom units at Garden Residences are designed to be luxurious, the 4-Bedroom+Study units are more for value-conscious buyers. The typical 4-Bedroo+Study unit at Garden Residences has a size of 1,119 sf, smaller than the 4-Bedroom units. The units do not come with private lift and dry kitchen, but the developer managed to put in a study area despite the smaller size. The layout looks similar to the 3-Bedroom+Study unit type, but with an additional room that can accommodate a single bed. Prices of 4-Bedroom+Study units start from S$1.928 mil or S$1,720 psf.
  • At Affinity, their 4-Bedroom+Study units have a more luxurious design in comparison to the units at Garden Residences. All bedrooms can fit in a queen size bed and the living/dining area opens out to the large balcony and the entire space is good for hosting home functions. The window at the study area allows ventilation and natural lighting. The size of the master bedroom is luxurious. A typical 4-Bedroom+Study unit at Affinity has an area of 1,453 sq ft and the price starts from S$2.15 mil or S$1,480 psf.

SPK’s VerdictThe comparison between the 4-Bedroom+Study units in Garden Residences and Affinity is a tough one. The 4-BR+S unit at Garden Residences is efficiently designed and more affordable than the unit at Affinity. If budget is not a constraint, the 4-BR+S unit at Affinity would stand out due to its more luxurious design. It’s a draw between the 2 projects. The design of the 4-BR+S units at both developments are equally good and hence, the budget of the buyer should be the key deciding factor in the selection process.

 

The 5-Bedroom Comparison

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  • At Garden Residences, the 5-Bedroom units are also designed to be one of the most luxurious unit types within the development. The 5-Bedroom unit at Garden Residences comes with a private lift and lobby, walk-in wardrobe in the master bedroom, bathtub in the master bedroom toilet and all 5 bedrooms are able to fit in queen size beds. Size of a typical 5-Bedroom is 1,539 sf and price starts from S$2.58 mil or S$1,676 psf.
  • Not sure if this is a coincidence or a shrewd tactical move by Oxley. But as Keppel Land and Wing Tai chose to position their 5-Bedroom units as the most luxurious units in Garden Residences, Oxley choose to outdo its competitors by designing 5-Bedroom units in the form of strata landed housing. A similar strategy that Oxley had adopted in the 4-Bedroom space as discussed earlier. The design is similar to the 4-Bedroom strata landed units, but with an additional room in the basement and bigger area. Area of typical 5-BR strata landed unit is 2,325 sf. Assuming that it is priced at similar psf as the 4-BR strata landed units, then each 5-BR strata landed unit could cost S$2.7 mil or more.

SPK’s VerdictJust like the 4-BR units at Garden Residences, the 5-BR units are designed to be luxurious units. Prices are not cheap and these units are targeted towards the affluent group of buyers. But once again, it seems that Affinity has something of better value to offer – strata landed 5-bedroom units with 2 private car park lots and bigger unit area, at a marginally higher price. A strata-landed unit is more unique and offers better prestige than a typical condominium unit. Hence, for 5-BR units, I would choose to put my money on a strata-landed unit at Affinity.

 

I hope readers have found this review useful. For those who have submitted cheques for balloting, I shall wish you all the best to get your dream unit. For those who have been contemplating, I hope this review has helped you to come to a decision.

Cheers!

SPK

4 reasons why a new launch review on Amber 45 is not necessary

Last week, a reader asked me whether I will be doing a new launch review for Amber 45.

Amber-45-2

I would have loved to do a new launch review for the benefit of my readers here. But, I was thinking to myself: Is it necessary?

It was obvious to me that Amber 45 will be selling like hot cakes and probably a new launch review would not be necessary, for the following 4 reasons:

  • Location, Location, Location – The location of Amber 45 needs no further introduction. This project is located in the popular Amber Road condo enclave, near Parkway Parade and with a lot of F&B options and amenities nearby. The future Marine Parade MRT Station and the new underground mall is only 550m away from the development.
  • Enbloc, Enbloc, Enbloc – Since the start of the enbloc craze last year, six developments in District 15, particularly the Amber Road and Meyer Road area, had been sold enbloc, creating 413 multi-millionaires. The timing of Amber 45 launch seems just nice for these folks who are seeking for a replacement home.
  • Rising prices – With the redevelopment of nearby Amber Park going for as high as S$2,600 psf, Amber 45 looks like a steal. Would you want to buy now at S$2,200 psf, or buy later at S$2,600 psf?
  • Value for Money – With the Phase 2 launch of the 99-year Seaside Residences hitting S$2,000 psf, buying the freehold Amber 45 at S$2,200 psf might seem a good value proposition. Moreover, Amber 45 is located nearer to city with more amenities around.

This is probably why UOL Group managed to sell 80% of the units at Amber 45 over the first weekend of launch.

New Launch Review: Are the 1-BR and 1+S at The Tapestry good for investment?

Tampines Avenue 10 is already a well-established private residential area, well served with a neighborhood retail centre near Tampines West Community Club, schools, and recreational areas (Bedok Reservoir). SRX has done a very nice drone video of the area:

And at such attractive price point, there is no doubt that The Tapestry will appeal to families who are looking to upgrade from HDB to a private condominium.

What about for investment? The absence of MRT and shopping centre within short walking distance may make the idea of buying a unit there for investment questionable. There might not be a big catchment for tenants here given that there is only an industrial area nearby. But it might surprise you that the 1-Bedroom and 1+Study units of the completed developments in the area are doing decently well in terms of rental demand and yield.

Rental

The table above shows the number of rental contracts and average rental rates of the condominium in the area from January 2017 to January 2018. This information has been extracted from URA. Do note that under URA’s classification, a 1+Study unit is also considered as a 1-Bedroom unit.

It is to my surprise that there is a good demand for 1-Bedroom and 1+Study units in the area. During the period, there were 110 units rented out, which translates to 38% of the existing completed stock of 1-Bedroom and 1+Study unit in the area. 2-Bedroom units seem to be more popular, with 177 units rented out during the same period, but as a % of the existing completed stock of 2-Bedroom unit in the area, the number of units rented out is 21%, less than that of the 1-Bedroom unit.

Moreover, there are only 472 units of 1-Bedroom and 1+Study apartments in the area, whereas, for 2-bedroom units, there are a total of 1,095 units in the area. With healthy rental demand and less competition among 1-Bedroom and 1+Study units in the area, it looks like 1-Bedroom and 1+Study at The Tapestry are good investment choices.

1 Bedroom and 1+Study units command an average rental of around S$1,750 per month. This translates to a gross rental yield of 3.5% based on the starting prices of S$600,000 for 1-Bedroom units at The Tapestry. This gross yield is considered decent and in line with the yield in the property market today. As market experts are anticipating rentals to bottom-out and recover this year, The Tapestry could potentially enjoy a better rental yield by the time it achieves TOP.

 

What are the available 1-Bedroom and 1+Study in the area?

Out of the existing 6 condominium developments in the area, only 3 developments – Q Bay, The Santorini and The Alps, offer 1-bedroom and 1-Bedroom+Study units targeting the property investor market. I estimate that only approximately 13% or 472 out of the 3,660 units in the 6 developments are 1-BR and 1+S units. Developers had generally positioned their developments to capture the upgrader’s market in the Tampines area and hence, unit sizes tend to be bigger to cater for families. The property investment market is under-served in this area.

Let us take a look at what are the 1-BR and 1+Study options in this area for investment:

 

Q Bay

Q Bay offers 78 units of 1-BR and 47 units of 1+Study, out of a total 630 units in the project. Typical size of a 1-BR unit is 527 sq ft and 1+Study is 517 sq ft. Personally, I like the layout of the 1-BR and 1+Study units at Q Bay as they are very efficient with minimal space wastage and no unnecessarily big air-con ledges and balconies. They are of a very comfortable size for own-stay but in today’s context, the sizes are considered ‘big’ as typical unit sizes of 1-BR and 1+Study have shrunk to 500 sq ft and below in the new norm.

The per square foot price of a 1-BR and 1+Study at Q Bay ranges from S$1,200 psf to S$1,300 psf in today’s market. Even though it may be cheaper than The Tapestry on a per square foot basis, but due to the bigger unit size, it might cost a buyer as much as S$50,000 more to buy a 1-BR or 1+Study at Q Bay instead of The Tapestry. I would expect the incremental rental income from the bigger unit size to be minimal, if not, none at all, since tenants in this area are likely to be middle management level without a big budget for accommodation.

Qbay

 

The Santorini

There are 165 1-BR units at The Santorini, out of the total 597 units in the entire development. The typical size of a 1-BR unit is 463 sq ft (open kitchen concept) and 527 sq ft (enclose kitchen concept). In terms of layout, the smaller 1-BR unit layout is typical of most 1-BR, but this layout comes with a long and narrow balcony that runs from living room to the bedroom, meaning that the actual usable area is much lesser.

For the bigger 1-BR unit, having an enclosed kitchen differentiates this unit from the rest of the 1-BR in the market. But one might question if there is really a need for an enclosed kitchen in a 1-BR unit. I feel that the developer could have tweaked the internal layout and design the existing kitchen area as a study room and have an open concept kitchen outside. That might have made the unit look more attractive to me. Just like the smaller 1-BR unit, this bigger unit also comes with a big balcony. And this unit also comes with 2 aircon ledges and a small planter on the balcony. Hence, the actual usable area will also be significantly lesser than the strata area.

In terms of pricing, the 1-BR units were sold at S$1,150 psf to S$1,200 psf on average during the initial launch and the price quantum is in the range of S$550,000 to S$650,000 per unit for most of the units. This was the pricing 2-3 years ago during the launch of the project. There aren’t any transactions made for 1-BR units during last half year. The current asking price for the 1-BR units on PropertyGuru is around S$1,250 psf to S$1,300 psf. The big sizes of the balcony and aircon ledge in the units should be taken into consideration when comparing the prices of the 1-BR units in the area.

Sant

The Alps

The Alps has 56 units of 1-BR apartments and 126 units of 1+Study apartments. There are more 1+Study units in The Alps, probably because the developer – MCC Land took into consideration that its earlier project The Santorini did not have any 1+Study units when designing The Alps. The typical size of a 1-BR unit at The Alps is 441 sq ft to 463 sq ft (with a long living room). The typical size of a 1+Study unit is 506 sq ft.

Without much surprises, the 1-BR and 1+Study units do come with big aircon ledge that runs across the entire bedroom’s window width and the balcony seems to be almost 75% of the size of the living room. This point about a high proportion of non-useable balcony and aircon ledge spaces is something that I point out earlier about The Santorini, another MCC Land’s project.

The 1-Bedroom units were sold at S$1,100 psf to S$1,200 psf on average during the initial launch and the price quantum is in the range of S$500,000 to S$550,000 per unit for most of the units. The 1+Study units were also sold at S$1,100 psf to S$1,200 psf on average during the initial launch and the price quantum is in the range of S$550,000 to S$600,000 per unit for most of the units. As The Alps was only launched in 2016, buyers are subjected to the 4-year SSD rule if they had bought during the launch.

The Alps

 

Is the 1-BR and 1+Study units at The Tapestry better investments than the ones in surrounding projects?

Yes, the 1-BR units and 1+Study units at The Tapestry are considered better choices for investments for the following reasons:

  • Good affordability
  • Efficient and functional layout
  • Less area wastage from aircon ledge
  • Better preservation of value as it is developed by a renown developer
  • Comprehensive list of fittings provided – cost embedded in price and finance by mortgage, also means lower ‘upfront’ capex for renovation upon TOP, improving returns

If you missed my earlier review of The Tapestry, click here to read!

New Launch Review: The Tapestry @ Tampines

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The long-awaited blockbuster new launch of the year is finally coming! The Tapestry, a 861-unit condominium developed by City Developments, is due to launch this coming weekend!

Is The Tapestry a good place to call home? Is The Tapestry a good investment? Should you be bringing your cheque book down to the launch this weekend?

Let us explore more below.

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A Well-established Location for Private Housing

The location of The Tapestry needs no further introduction. The Tapestry is located along Tampines Ave 10 and close to Bedok Reservoir. Around the area, there are already 5 private condominiums and 1 executive condominium. This area is a well-established location for private housing. In the area, we can find plenty of schools – Primary, Secondary, Polytechnic and International School. Neighborhood retail amenities at Tampines Street 81 is a short 10-min walk away. The nearby retail warehouses – Ikea, Courts and Giant are just 6 min drive away from The Tapestry. For outdoor lovers, the Bedok Reservoir is also approximately 10-min walk away from The Tapestry.

The empty plot of land across the road along Tampines Industrial Ave 2 is zoned for future industrial development. The Tapestry is probably the last plot of land in the area that is left for private condominium development. There is another plot of land along Tampines Ave 10, beside United World College but this land is zoned for Executive Condominium development. Tender for this land will be held in May 2018 and this future EC is likely to be launched only in mid-2019.

The nearest MRT Station that serves this area is the Tampines West MRT Station that connects to the Downtown Line, but it will take 20-min to get there by foot. Nonetheless, the well-connected road network allows residents to access to different parts of Singapore easily. Tampines Ave 10 serves as a major arterial road that connects to TPE (towards the East) and PIE via Bedok North Road (towards the West).

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What are the strength and weakness of the Condominium?

Strength

  • A well-designed project that caters to market demand
  • Well-established location for private housing
  • Plenty of schools in the area – Primary, Secondary, Temasek Polytechnic, United World College
  • Neighborhood retail amenities and large retail warehouses – Ikea, Courts and Giant nearby
  • Probably the last site in the area for private condominium
  • Bedok Reservoir is nearby for recreational activities
  • Low entry price point
  • Developed by CDL – the top developer in CONQUAS ranking
  • Constructed by Woh Hup – the top contractor in CONQUAS ranking

 Weakness

  • Long walking distance to MRT station
  • Lack of a shopping mall in the area

 

Developed by CDL, Build by Woh Hup, Quality can be assured

The Tapestry is developed by one of the biggest developers in Singapore – City Developments Ltd. CDL has been ranked as the top developer in Singapore under the Construction Quality Assessment System (CONQUAS) developed by the Building and Construction Authority of Singapore (BCA). CONQUAS assesses the quality of workmanship in structural works, architectural works, and mechanical and electrical works, by sampling a representative number of units in a housing development. Several of CDL’s projects such as The Glyndebourne, Tree House, Nouvel 18 and Hundred Trees are also rated among the top projects in Singapore, in terms of construction quality.

The main contractor for The Tapestry is Woh Hup. Woh Hup is a highly reputable construction firm and it has also been ranked as the top contractor under CONQUAS.

At The Tapestry, buyers can be assured that they are getting a condominium of high quality.

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Analysis of Surrounding Condos

In the area, there are already 5 private condominiums and 1 executive condominium.

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The unit distribution of these developments is shown in the table below, with some of my observations.

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  • There is a total of 3,660 units in this area from 6 projects, including The Alps which is still under construction
  • Majority of the units in the area are 2-Bedroom and 3-Bedroom units. There are 1,095 units of 2-Bedroom and 2+Study apartments, i.e. 30% of the total units in the area. There are 1,598 units of 3-Bedroom and 3+Study apartments, i.e. 44% of the total units in the area
  • There are only 472 units of 1-Bedroom and 1+Study apartments in the area, i.e. 13% of the total units in the area. These units are typically bought for investment purposes
  • This doesn’t come as a surprise since the developments here primarily target the HDB upgraders’ market and families and hence developers tend to build bigger units

 

Site Plan and Unit Distribution

Below is my review of the site plan:

  • Most of the blocks are at least 30 m apart from each other
  • Car entry is via Tampines Street 86
  • The inwards pool facing units are the most premium units
  • A lot of landscaping, pools and facilities surrounding the entire development
  • The smaller 1-BR/1+S units are all located at Blk 51 and 61 that are nearer to Tampines Street 86
  • Bin Centre and Substation are located beside Blk 51
  • There will be a future place of worship beside Blk 51
  • Carpark ingress and egress are also located next to Blk 51
  • CDL has cleverly put the small units in Blk 51, knowing that the small units are sellable despite the ‘negative’ attributes of the block location
  • Majority of the units do not have issues with the evening sun. Units along Tampines Ave 10 will receive some evening at an angle, but these units do enjoy an unblock view towards Tampines Quarry

Site Plan

Looking at the unit mix and sizes table below, The Tapestry has a higher proportion of the smaller 1-BR, 1+S and 2-BR units and smaller proportion of the bigger 3/4/5-BR units than the other projects in the area. This is probably to fill the shortfall gap of these smaller units in the area. The developers for the older condominiums such as Tropica, Waterview and Q Bay built a lot more of the bigger 3/4/5-BR units in the area. CDL is targeting the segment that has been underserved with pent-up demand.

unit mix

Unit Layout Review

After comparing the different unit layouts at The Tapestry against the other surrounding projects’ layouts, my conclusion is that the developer CDL has made the effort to study and understand the other condominiums in the vicinity and then design a project to offer unique design, layout and sizes that are lacking in the area. All in all, CDL has put in the effort to make sure that The Tapestry can meet the requirements of buyers and offers what other surrounding condominiums can’t provide.

Below is a review of the various typical layouts at The Tapestry:

1BR

1+S

2BR

2BRP

3BR

3BRP

4BR

5BRDK

 

Pricing

Indicative pricing for The Tapestry is listed in the table below:

The-Tapestry-Price-and-Maintenance-Fee

You might think that pricing at The Tapestry does not look cheap. But if we consider the recent land sale prices in the collective sales market, I would think that The Tapestry is fairly priced.

Among the surrounding condominium developments, the supply in the secondary market is low. Santorini and The Alps were launched in 2015 and 2016 respectively and buyers of these projects are still under the 4-year seller stamp duty restriction period. Other projects like Waterview and Q Bay tend to have bigger units and hence, higher price quantum. The Tapestry would probably appeal to buyers who are focusing on affordability and the price quantum of a unit.

Moreover, the Tapestry is the last private condominium in the area (excluding the EC land that will be launched later this year). This might be the last chance for someone who wants to buy an affordable unit in the area.

CDL is also generous in its fittings. The list of definitely looks impressive and gives buyers a feeling of good value for money:

  • Wireless SMART Home System
    • 1 smart home gateway with built-in IP camera
    • 1 smart home voice assistant
    • 1 digital lockset
    • 1 main door sensor
    • 1 lighting control
    • 2 air conditioner controls
  • Haiku designer ceiling fan
  • Teka Cooker Hood
  • Hob
  • Oven (Teka combi steam oven for 4/5 BR)
  • Refrigerator
  • Washer Dryer
  • Kitchen and Bathroom wares from Grohe and Duravit

 

Early buyers of The Tapestry to benefit from Sim Lian’s Tampines Court project

After the launch of The Tapestry, we might have to wait for another 1 to 2 years for the next condominium launch in Tampines to happen – Sim Lian’s Tampines Court project.

According to a report from DBS, the estimated breakeven selling price for Sim Lian’s project is around S$1,160 psf, higher than the estimated breakeven selling price of S$1,065 psf for The Tapestry. This would probably mean that Sim Lian is likely to launch the Tampines Court project at a higher price than The Tapestry. It may be around 9% higher if we compare the difference in the breakeven price for the 2 projects. If there is no major shock to the property market within the next 2 years, we can expect buyers of The Tapestry to benefit from a paper gain when the Tampines Court project launches.

 

Why you should keep a close watch on The Tapestry launch

You might not be interested in The Tapestry. But nonetheless, it is important to keep a close watch on the pricing and sales performance of The Tapestry. Why?

Singapore residential property market has been overly-hyped up by all the media reports on enbloc deals, recovering residential prices and rentals. The expectation of a strong pick-up in the residential market has already been set in the mind of property buyers. Now it is the time to see whether this expectation translates to actual property sales transactions.

The Tapestry is the first major new project launch in 2018 and this project should be a bellwether of the Singapore property market, particularly the mass market segment, for the year ahead.

 

To find out whether the 1-Bedroom and 1+Study units are good for investment, please continue reading by clicking this link!

Do you feel the enbloc heat?

The enbloc craze just keeps getting crazier. There were many significant developments in collective sale market over the past week.

The Next Enbloc Blockbuster – Mandarin Gardens

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First, we have a potential blockbuster collective sale exercise coming up! Mandarin Gardens is one step closer to being put up for collective sale. A mind-blowing reserve price of S$2.45 billion has been set for Mandarin Gardens. This price has not even taken into account of the additional lease upgrade premium that a developer will need to pay the state for a fresh 99-year leasehold.

If Mandarin Gardens is successful in its collective sale attempt, it will set a new record as the most expensive collective sale transaction in Singapore.

In a Business Times news article, Mr Raymond Khoo from C&H Realty mentioned that “Chinese developers might want to showcase what they have done in Johor Baru and want to bring it over to Singapore”. Chinese developers such as Guangzhou R&F Properties and Country Garden Holdings do come to my mind as what Mr Raymond Khoo had described as possible bidders for the site.

Other potential bidders named by another “industry specialist” includes big names like Capitaland, Qingjian, Longan Property and Nanshan Group. Capitaland is probably still in an early stage of its landbank replenishing exercise, having only acquired 1 site since the market recovers.

It seems that the strategy is already in place in search of buyers for this mega-site and if Mandarin Gardens succeed in its collective sale attempt, the risk appetite of developers may be raised to a higher level and there will be a significant amount of enbloc money to flow back into the property market and hence sustaining the sales momentum.

The date for an extraordinary general meeting to approve sale conditions for Mandarin Gardens has been set for March 25. With a requirement of 80% approval from the over 1,000 owners in the development, this is not an easy task to achieve. I will definitely be looking forward to the EGM results next week!

Achieving 20% Premium over Reserve Price – Katong Park Towers

katong park

Sitting on a piece of prized land? Don’t worry, developers are still willing to pay a good premium for your land.

Last Friday, Bukit Sembawang acquired Katong Park Towers for S$345 mil, a 20% premium over the reserve price of the development.

Katong Park Towers is located along Arthur Road in District 15, near the future Katong Park MRT station. It is within short driving distance to town and CBD via East Coast Parkway expressway. The property has a 99-year leasehold tenure from 5th April 1982. An estimated lease upgrade premium of S$60 mil is payable by Bukit Sembawang to top up the leasehold to a fresh 99-year. Including the LUP, total land acquisition cost payable by BSEL will add up to a total of S$405 mil or S$1,280 psf ppr.

Prior to the collective sale of Katong Park Towers, there were 4 collective sales concluded in District 15 around Amber/Meyer Road since last year. These sites were sold at an average land price of S$1,442 psf ppr. Katong Park Tower’s price of S$1,280 psf ppr is 11.2% below the average land price of a freehold land in the area reflecting a fair discount due to the difference in the land tenure.

Looks like we have 116 happy owners at Katong Park Towers now. And the redevelopment by Bukit Sembawang is definitely a project to look forward!

2nd biggest enbloc sale in Singapore – Pacific Mansion

pacific mansion

Just this morning, Guocoland and Hong Leong Group announced the acquisition of Pacific Mansion for S$980 mil, 4.5% above the reserve price of S$938 mil. This is the most expensive acquisition made by developers in this round of collective sale cycle, and the 2nd biggest enbloc sale ever in Singapore property market. The S$1.3 bil sale of Farrer Court still holds the record as the largest enbloc transaction (for now).

Base on my estimate, the breakeven price for Pacific Mansion is approximately S$2,400 psf to S$2,500 psf and eventual selling price for the project could be more than S$3,000 psf.

Each owner of the development’s 290 apartments will stand to receive a gross payout of S$3.26 million to S$3.48 million, while the owners of the two shop units there will pocket between S$2.2 million to S$4.5 million each. Units at Pacific Mansion were just going for S$1.7 mil to S$1.9 mil less than a year ago! You would have made a huge profit if you bought a unit there last year!

290 happy owners out there!

 

Looks like the collective sale market is heating up and not cooling down. Let’s see if Mandarin Gardens can bring the heat up to the next level. Akan Datang!

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