Handy Road-Mount Sophia area could get a lift from CDL’s future launch

By Bong Xin Ying / EdgeProp | August 19, 2018 1:40 PM SGT
When the tender for the 51,626 sq ft Handy Road government land sales (GLS) site closed at the end of January, City Developments (CDL) trumped nine other bidders and won with the top bid of $212.2 million, or $1,722 psf per plot ratio (psf ppr). In its 2QFY2018 results released on Aug 8, CDL announced that it would launch the new project of 188 units in 1QFY2019.
Tricia Song, Colliers International head of research for Singapore, estimates CDL’s breakeven for the project at $2,300 psf.
Lee Nai Jia, Knight Frank Singapore senior director and head of research, says: “CDL’s new project on the Handy Road GLS site is expected to set a new benchmark price for the neighbourhood, and this will have a positive impact on prices of surrounding condos.”
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Located nearby is the 313-unit 8 @ Mount Sophia condo by Frasers Property completed in 2007. When it was launched in March 2005, the average price of units sold in the 103-year leasehold project averaged $728 psf.
Located in the Mount Sophia area, which has seen a marked rejuvenation in the past decade, 8 @ Mount Sophia is regarded as attractive to investors and owner-occupiers (Credit: The Edge Singapore)
Resale prices at 8 @ Mount Sophia have doubled from the time of launch to range from $1,311 to $1,659 psf over the past four months (from April to August). In April, a 1,356 sq ft, three-bedroom unit on the sixth floor fetched $2.25 million ($1,659 psf). Meanwhile, the latest recorded sale was that of a 1,453 sq ft, three-bedroom unit on the sixth floor of another block. It was sold for $2.11 million ($1,452 psf), according to a caveat lodged on Aug 6.
The attraction of the Handy RoadMount Sophia neighbourhood is its proximity to Plaza Singapura shopping mall, which is linked to the Dhoby Ghaut MRT interchange station; The Cathay, a mixed-use development with a cinema, a mall and residences; as well as School of the Arts (SOTA).
“Location-wise, 8 @ Mount Sophia is very attractive,” says Eugene Lim, key executive officer at ERA Realty Network. “The rental demand is also quite strong, as there were 33 rental transactions in 2Q2018 alone.” Gross rental yield for units at 8 @ Mount Sophia is holding at 3.3%, according to EdgeProp data.
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Adjacent to 8 @ Mount Sophia is the 118-unit Suites at Orchard, which was completed in 2014. The latest transaction at Suites at Orchard was that of a 753 sq ft, two-bedroom unit on the fourth floor that changed hands for $1.6 million ($2,123 psf), according to a caveat lodged on March 19.
Two adjacent units were sold in February: One was a 614 sq ft, two-bedroom unit on the second floor that changed hands for $1.39 million ($2,266 psf); the other was a 549 sq ft, one-bedroom unit that went for $1.265 million ($2,304 psf).
Suites at Orchard was built on a 99-year leasehold GLS site. The project was launched by Allgreen Properties in 2010 and comprises a mix of one-bedroom apartments to three-bedroom duplexes and penthouses sized from 549 to 1,776 sq ft.
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Suites at Orchard enjoys the convenience of proximity to Plaza Singapura and the Dhoby Ghaut MRT station (Credit: Albert Chua/ The Edge Singapore)
Adjacent to CDL’s site on Handy Road is Nomu, a 50-unit, high-end boutique condo completed in 2009. The latest transaction at the freehold Nomu involved a 603 sq ft, one-bedroom unit on the sixth floor. It was sold for $1.38 million ($2,289 psf), according to a caveat lodged on May 31.
The newest development in the neighbourhood is also the biggest there: The 493-unit Sophia Hills, jointly developed by a consortium comprising Hoi Hup Realty, Sunway Developments and SC Wong Holdings, was completed earlier this year. The project is located on a 255,900 sq ft site with a 99-year lease, and the site is also occupied by the Methodist Girls’ School, Trinity Theological College and Sophia Student Hostel. These three buildings have been conserved and form part of the Sophia Hills residential development.
Alice Tan, director of residential project marketing at Knight Frank Singapore, notes that private condos in the Handy Road and Mount Sophia neighbourhood have transacted at lower psf prices than other areas with the prime District 9 address in the Orchard Road neighbourhood. “The Mount Sophia area has seen a marked rejuvenation in the past decade, with new residential, commercial and institutional developments being introduced in the District 9 locale,” she says. “Both investors and owneroccupiers get to enjoy multiple conveniences, with proximity to Orchard Road, the CBD, retail malls and places of leisure, and schools and transport connectivity to four MRT lines.”
Tan adds that, in view of the latest cooling measures, more buyers are likely to be attracted to districts that offer the twin benefits of appealing psf prices and locational advantages.