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

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.

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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!

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

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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

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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!

Paying S$1,300 psf for a EC in future? Are you serious?

How much hotter can the Singapore property market get?

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Few days back, CDL put in a top bid of S$583 psf ppr for an Executive Condominium site at Sumang Walk in Punggol.

It was not just CDL’s tender price that set a new record price for an EC land. In fact, all the 17 bids were above the previous record price paid for the Lake Life EC site in 2013.

According to industry experts, breakeven selling price for the Sumang Walk site is likely to be around S$1,000 psf to S$1,100 psf. Hence, CDL is likely to launch this EC at around S$1,300 psf, which would be as much as a what a private condominium in the area fetches today.

The recently launched Parc Botannia was only selling at an average of S$1,280 psf and Sing Holdings acquired the land at only S$517 psf ppr less than 2 years ago. Do bear in mind that Parc Botannia is a private condominium and not EC.

For the upcoming EC launch  – Rivercove Residences, the developer Hoi Hup paid only S$355 psf ppr for the site. With an indicative price of S$800 psf to S$900 psf, Rivercove Residences do look like a good bargain now, if the Sumang Walk EC is going to be launched at S$1,300 psf.

Now, how would the buyers react to this news? Are buyers going to rush in and buy now in anticipation of an expected rise in property prices?

The upcoming new launches will give us the answer.

Weekly Kopi Talk (17/2/18 – 23/2/18)

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21st Feb 2018 – Implicit message in buyer’s stamp duty hike

SPK: As mentioned in my earlier blog post, this increase in BSD rates is not going to hurt most of us unless you are going for a high-end property. In fact, prior to the Budget, the market was expecting the government to introduce more drastic measures to cool the heated enbloc market. This mild measure seems to be a good news for the market.

20th Feb 2018 – Reit ETFs to enjoy tax transparency

SPK: The transparency for REIT ETFs is definitely a good news for the SREITs and fund management industry. Currently, there are 3 REIT ETFs in Singapore, with a total AUM of S$250 mil and their dividend yield ranges from 4.12% to 4.75%. The tax concession should result in some uplift in their dividend yield and make the ETFs more attractive to investors.

Short-term impact of the tax concession on the SREIT sector may be limited due to the small AUM size of the REIT ETFs in Singapore. It will require some time before the REIT ETF sector grows to a substantial scale that is enough for it to exert greater influence on the SREIT sector. Nonetheless, the tax transparency will be a good start to grow the REIT ETF sector.

20th Feb 2018 – Singapore property stocks fall on higher tax for home purchases

SPK: Singapore property stocks fell unexpectedly the day after the announcement of the hike in buyer’s stamp duty, despite the consensus view that the increase will not derail the housing recovery in Singapore. This was probably a knee-jerk reaction to the news and share price of developers managed to recover most of the losses the following day.

19th Feb 2018 – Singapore property stocks show ‘fatigue’ with surge in en-blocs

SPK: The collective sales market might be entering a cooling-off phase, as seen from the recent spate of collective sales attempt that ended without a sale being concluded during the public tenders. Developers were more aggressive in buying land last year. For most of the tenders, there were multiple bids and the majority of these tenders were concluded at a premium to the reserve prices.

 

Some of the recently sold sites like Brookvale Park and Pearl Bank Apartments did not manage to find a buyer during the public tender process. Nonetheless, they were able to secure a buyer via private treaty. This probably means that developers are still hungry for land. But developers might be more selective and cautious in buying land these days.

 

Buyer’s Stamp Duty has just been raised. What should I do?

Oh no! The government has just raised Buyer’s Stamp Duty for residential properties! What should I do? Should I exercise my option now before the clock strikes 12? More cooling measures coming up? Is the market going to CRASH???

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Fret not. I am here to give you (my) answers!

First of all, let’s not get confused. The additional 1% BSD is applicable for property value in excess of S$1 million. So if you are looking to buy a property below S$1 mil, please go back and have a good rest and not fret over this BSD hike.

What if you are upgrading to S$1.2 mil condo? Sad to say, you will be affected by this new rule if you do not exercise your option by midnight. How much more BSD do you need to pay? That will be S$2,000 payable to our tax man. Is there a need to rush? Please think twice. If you miss the deadline before midnight, at most you pay an additional S$2,000 in BSD. But if you make a rash decision and have to forfeit your option fees (partial), then that will be more than the additional S$2,000 for BSD.

But if you are a multi-millionaire who wants to buy a New Futura? Then maybe you should act now, if not you might end up paying as much as S$20,000 more in BSD. But maybe this S$20,000 is considered ‘peanuts’ to you, maybe?

My personal thought is that this increase in BSD rates is not going to hurt most of us unless you are going for a high-end property. In fact, prior to the Budget, the market was expecting the government to introduce more drastic measures to cool the heated enbloc market. This mild measure seems to be a good news for the market.

So, keep calm and carry on!

So I was wrong

I have to admit that I am wrong this time round.

This morning, property giant Capitaland announced that it has acquired the iconic Pearl Bank Apartments in Outram Park area for S$728 mil, at the reserve price of the sellers. The site has a land area of 82,376 sq ft and plot ratio of 7.45, translating to a permissible GFA of approximately 613,701 sq ft. Capitaland will pay an additional S$201.4 mil to the government to top-up the land lease to a fresh 99-year. The total cost of the site will be S$929.4 mil or S$1,515 psf PPR. Capitaland plans to build around 800 units in the new development.

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When I was writing my earlier post on Pearl Bank , I felt that the high asking price of the owners and the large investment quantum are major hurdles for a collective sale to happen at Pearl Bank and risk-reward is not optimal for the developer. Based on my estimate, such a project would probably breakeven at S$1,900 psf to S$2,000 psf and developer will need to sell at S$2,200 psf for a decent margin. Assuming an average unit size of 750 sq ft at S$2,200 psf, an average unit at the redeveloped site will cost a whopping S$1.65 mil! Mind blowing numbers for a district 3 property! For this amount, you could actually get a prime district property instead.

But it looks like this is turning into reality with CapitaLand’s bid and the aggressive land acquisition strategy by developers seem to have even exceeded my expectations. With this new development possibly setting a new record price in District 3, it is likely that the nearby District 9/10/11 properties will get to enjoy the spillover effect. A rising tide lift all boats!

Probably one thing that I got it right is that Capitaland is finally jumping on the enbloc bandwagon, which I mentioned in an earlier blog post. With CEO Lim Ming Yan expecting property prices to rise up to 10% this year, it is unlikely that Capitaland’s acquisition spree will end here.

Let’s also not forget that some of the big boys have not started playing this enbloc game yet! Wanna make a guess who they are?