At least 25,000 units of private residential and executive condominiums will be looking for buyers over the next two years, on top of the existing launched but unsold stock in the market. Among them, several projects might pique prospective buyers looking for defensive assets.
We lined up upcoming projects located in the city fringe or near regional centres and close to an MRT station, which could hit the market in 4Q2015 and 2016. Notably, there are just a handful of them, amid the sea of projects expected to come onstream over the next two years. Prices are also likely to hold firm, based on the highest bids received for the land parcels.
Potong Pasir MRT station
MCC Land is expected to hold the preview for The Poiz Residences in mid-November. It is one of most anticipated projects, given its mixed-use development status and location right above the Potong Pasir MRT station on the city fringe. The project will offer 731 residential units and 84 retail units, named The Poiz Centre.
Tenders for the site attracted no less than 15 bids. MCC Land’s winning bid of $775 psf per plot ratio (ppr) could potentially translate into a competitive selling price for the project, which includes a retail component.
In June this year, a site for pure residential use near Braddell MRT station was sold to Evia Real Estate and its consortium for $755 psf ppr. Recently, a residential site on Lorong Lew Lian, some 400m from the Serangoon MRT station, drew a top bid of $710 psf ppr.
Based on all their new sale caveats, nearby projects such as Sant Ritz, Sennett Residence and The Venue Residences were transacted at an average price of $1,449 psf. Smaller units of between 500 and 700 sq ft changed hands at an average price of $1,539 psf, while those between 700 and 900 sq ft went for $1,458 psf on average.
On the rental front, nearby Nin Residence, which was completed in 2014, commanded an average monthly rent of $3.39 psf in 3Q2015. The project clocked 18 rental transactions during the period. Based on $3.39 psf rent and an expected selling price of $1,400 to $1,500 psf, the rental yield for new projects near Potong Pasir MRT station would range from 2.7% to 2.9%. While projects that are far from MRT stations may command higher rental yields owing to their smaller price tag, they are likely to take a longer time to rent out, while a higher yield is synonymous with higher risks.
Kovan MRT station
Asset Legend Ltd was awarded the site on Upper Serangoon Road in November 2014, beating 10 other developers. Located less than 300m from the Kovan MRT station, the site is zoned for residential use, with commercial units on the first storey. It will also offer 390 apartment units and five terrace houses. Given the tender award date, the project could potentially be launched in the first half of 2016.
Prices are also likely to be in the region of $1,400 to $1,500 psf. The average price for units at nearby projects — The Tembusu and Trilive — was $1,542 psf. Smaller units ranging from 500 to 700 sq ft were transacted at $1,569 psf on average, while bigger units of between 900 and 1,100 sq ft changed hands at $1,513 psf. However, both developments are freehold, which tend to command a premium of $50 to $100 psf over 99- year leasehold comparable projects.
Asset Legend paid $849 psf ppr for the site, which was the first to be affected by the new construction requirements, including a certain level of prefabricated components.
Lakeside MRT station
A stone’s throw from the Lakeside MRT station, Parcel B at Jurong West Street 41 was contested by nine bidders. MCL Land was awarded the site in March this year with its top bid of $630 psf ppr. Based on the tender award date, MCL Land might launch the project in 1H2016.
The breakeven price for the site is likely to be in the region of $1,050 to $1,100 psf, which potentially translates into a selling price of $1,200 to $1,300 psf. The site can yield an estimated 575 units, according to the URA, although MCL Land is reportedly planning to build close to 600 units, with one- and two- bedroom units accounting for about 60% of the project.
The makeover of the Jurong Lake Garden which fronts the project will add to its appeal. Construction of the west side of the garden is scheduled to start next year and complete in 2018. Ideas gathered during public consultation include cycling tracks and F&B outlets.
Braddell MRT station
The site at the junction of Lorong 6 and Lorong 4 Toa Payoh is about 500m from the Braddell MRT station. A consortium comprising Evia Real Estate, Greatearth and Gamuda Bhd was awarded the site in June this year, and this potentially leads to a launch date in the second half of 2016.
The consortium beat 13 other bidders for the site with its top bid of $755 psf ppr. The breakeven price for the project is expected to hover around $1,200 psf, which potentially translates into a selling price of between $1,400 and $1,500 psf. The project is expected to benefit from the dearth of new launches in the vicinity.
Queenstown MRT station
Another site on Dundee Road, next to the Queenstown MRT station, was awarded in June this year to HY Realty, whose shareholders own Hao Yuan Investment. HY Realty is reportedly planning to build a 700- unit condo and launch the project in the first half of 2016.
The site drew a total of nine bids, with a top bid of $871 psf ppr. The breakeven price of the project is estimated to be $1,300 psf, which translates into a potential selling price of between $1,500 and $1,600 psf.
Location of projects in the city fringe or near regional centres that could hit the market in 4Q2015 and 2016
This article appeared in The Edge Property Pullout, Issue 703 (November 16, 2015) of The Edge Singapore.