Integrated developments: Withstanding the test of time

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/ EdgeProp Singapore
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April 30, 2021 6:30 AM SGT
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Compass Heights, the first private condominium linked to an integrated transport hub and shopping mall, was completed in 2002 and continues to command a rental yield of 3.3% (Photo: Samuel Isaac Chua/EdgeProp Singapore)
SINGAPORE (EDGEPROP) - Singaporean Ms Lau believes she was one of the first residents to move into the 536-unit Compass Heights condominium in Sengkang when it was newly completed in 2002. When it was launched in 2001, demand was intense, given the novelty of the project: the first private condominium sitting on top of a shopping mall and an integrated transport hub with MRT and LRT stations as well as an air-conditioned bus interchange.
The average price was about $482 psf during the first two months of launch in 2001, according to URA Realis data. Today, units at Compass Heights have changed hands in the resale market for about 1.7 times higher, at an average of $818 psf, based on transactions from November 2020 to April to date.
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Convenience

The main attraction of the project is its convenience. “It’s integrated with the shopping mall [Compass One], Sengkang MRT Station and the bus interchange,” says Lau. “I don’t need to drive if I’m going to Orchard Road or Raffles Place where parking is expensive. I can just take the MRT, which is just downstairs.”
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It is ideal for retirees too. “My parents are not as mobile as they once were,” adds Lau. “But it’s still convenient for them as the clinic is just two floors down by lift, and the polyclinic is just next to the mall.”
For Lau, having a mall downstairs is a great plus factor. “I can just run down and buy a loaf of bread or the last few pieces of bak kwa before the shop closes for Chinese New Year,” she says.
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Compass One opened in September 2016 after an extensive refurbishment by M&G Real Estate. The net lettable area (NLA) of the mall increased to 272,881 sq ft with 209 shops, from 126 shops with an NLA of 269,546 sq ft before (Photo: Albert Chua/EdgeProp Singapore)
Formerly known as Compass Point, the shopping mall integrated with Compass Heights was purchased by M&G Real Estate, refurbished and reopened as Compass One in September 2016. M&G Real Estate has increased the net lettable area (NLA) of the mall to 272,881 sq ft with 209 shops, from 126 shops with an NLA of 269,546 sq ft. “The range of eateries is much wider than before, with everything from a food court to casual dining and restaurants for celebratory meals,” says Lau.
Compass Heights shows a 3.3% rental yield per annum — higher than the other condominiums in the area, based on URA and EdgeProp data for the past 36 months (see Comparison table above). “It looks like Compass Heights, built almost 20 years ago has withstood the test of time,” says Ken Low, managing partner of SRI.
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Investors have found that integrated developments make ideal investments given their rentability, adds Low. When he was marketing the 920-unit North Park Residences in 2015, more than half (486 units) were sold within the first month of launch at a median price of $1,374 psf, according to URA data. Low himself became convinced of the project’s potential and purchased a three-bedroom, dual-key unit. This allows him to rent out the unit as two separate apartments: a two-bedder and a studio.
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North Park Residences was completed in 2018, and units command a rental premium of 20% relative to other standalone and mixed-use condos in the area (Photo: Samuel Isaac Chua/EdgeProp Singapore)

Rental premium

Since North Park Residences was completed in 2018, Low’s studio and two-bedroom unit has been “constantly rented out”, he says. “The rental market for integrated developments is very strong,” he adds. Based on EdgeProp data, the average rental rate at North Park Residences is $3.6 psf per month, which is a 20% premium to the average rents of $2.9 to $3.1 psf of the other three condominiums in the Yishun area, two of which are mixed-use developments, namely Nine Residences and The Wisteria, while the third project is the condominium, Symphony Suites (see below).
North Park Residences sits on top of Northpoint City, which was formerly Northpoint Shopping Centre. A new wing was added to the existing mall and the expanded Northpoint City with 500,000 sq ft of retail space opened in December 2017. The mall is connected to the Yishun Integrated Transport Hub (MRT station and bus interchange), Nee Soon Central Community Club, the Yishun Public Library and the Yishun North Neighbourhood Police Centre. It was the first time that public amenities were integrated this way.
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There has been much debate over the definition of an integrated development, and how it differs from a mixed-use development. “Mixed-use developments are not necessarily integrated developments,” points out Ong Choon Fah, CEO of Edmund Tie. “It’s not just putting two or more different uses together and calling it an integrated development.”
All the different components in an integrated development have to be seamlessly connected with an integrated concept, adds Ong. “It must have at least two different components that are integrated in terms of design and is part of a TOD [transit-oriented development]. TOD is now a worldwide trend as it’s more resilient and sustainable.”
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‘Limited-edition units’

Going by that definition of an integrated development, there are 14 completed condominiums within 13 integrated developments across Singapore today, including Compass Heights and North Park Residences (see “Completed integrated developments”). These 14 completed condominium developments yield a total of 7,513 units, which translates to just 2.5% of total non-landed stock of 304,562 condominium and apartment units, according to URA data as at end-1Q2021.
There are at least four more integrated developments in the pipeline: the 558-unit Midtown Modern and 219-unit Midtown Bay at Guoco Midtown on Beach Road; the 667-unit The Woodleigh Residences at Bidadari Estate; the 680-unit Sengkang Grand Residences in Buangkok; and the upcoming 600-unit Pasir Ris 8 at Pasir Ris. Together, they will add another 2,724 units to the stock of condominium projects that are part of a TOD.
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Low: I would still consider such residences as ‘limited-edition units’ in comparison with the total stock of condominiums and apartments today (Photo: Samuel Isaac Chua/EdgeProp Singapore)
“I would still consider such residences as ‘limited-edition units’ in comparison to the total stock of condominiums and apartments today,” says SRI’s Low.
Sengkang Grand Residences, which will sit on top of the 160,000 sq ft Sengkang Grand Mall, is integrated with Buangkok MRT Station. Other public amenities include childcare centre, community club and even a hawker centre. The project is also linked to a new park connector that will bring residents to the neighbouring Compassvale Ancilla Park.
Launched in November 2019, average price of units sold at Sengkang Grand Residences is $1,737 psf, which is a 32.6% premium to the neighbouring Jewel @ Buangkok, a private condominium which was completed in 2016.
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Park Place Residences, being part of an integrated development, commands a rental premium of about 25.3% relative to neighbouring condominiums (Photo: Samuel Isaac Chua/EdgeProp Singapore)

City fringe, up-and-coming districts

In the city fringe, integrated developments are equally sought after. Anchoring Paya Lebar Central, which URA has designated as a commercial hub as part of its decentralisation plan, is Paya Lebar Quarter. The development, which sits on a 4ha site, has three Grade-A office blocks with a total of a million sq ft of office space; the 340,000 sq ft PLQ Mall; and Park Place Residences, three residential towers with 429 units. The residences were fully sold in 2019.
First launched for sale in March 2017, Park Place Residences sold 50% of its units at a median price of $1,805 psf on the first day of launch. The second phase of 219 units were launched a year later in 2018, with 149 units snapped up that weekend. The project was fully sold by end-2019 at an average price of $1,933 psf. Around 95% of the buyers were Singaporeans and permanent residents.
For those who bought for investment, the price premium is also accompanied by rental premium: Based on average rents psf, Park Place Residences leads with $5.2 psf per month, which is a 25% premium over the average rents of the other private condominiums in the area, which are hovering in the range of $4.1 to $4.2 psf per month.
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Located in the new Bidadari Estate is The Woodleigh Residences, which will sit on top of the 310,000 sq ft The Woodleigh Mall and is seamlessly integrated with the Bidadari Integrated Transport Hub, which includes the MRT station and an underground air-conditioned bus interchange. The project is also integrated with a community club and childcare centre as well as neighbourhood police centre. What’s more, the development is integrated with the 10ha Bidadari Park, where apartments fronting the park will enjoy views of Alkaff Lake.
As the project is the only integrated development in Woodleigh and the upcoming Bidadari Estate, units at The Woodleigh Residences fetch a premium, with average prices at $1,919 psf (see “Non-landed private residences in Woodleigh”). The project is more than 63% sold since its launch in November 2018, and is expected to be completed sometime in 2023.
The only other new development in the Woodleigh area is the 805-unit Park Colonial on the opposite side of Woodleigh MRT Station. It was launched in July 2018, on the eve of the property cooling measures, and is 98% sold to date. Average price of Park Colonial is $1,778 psf, according to URA data for the last 36 months.
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As the project is the only integrated development in Woodleigh and the upcoming Bidadari Estate, units at The Woodleigh Residences fetch a premium, with average prices at $1,919 psf (Photo: Albert Chua/EdgeProp Singapore)
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Downtown Core

There is a greater concentration of integrated developments in the Central Region, especially the Downtown Core, for instance, The Orchard Residences on prime Orchard Road, South Beach Residences on Beach Road, Duo Residences just off Beach Road, Marina Bay Residences and Marina Bay Suites which are both part of Marina Bay Financial Centre as well as Marina One Residences which is also located in the Marina Bay area. There is also Wallich Residence at Guoco Tower in Tanjong Pagar.
In the Downtown Core, upcoming integrated developments include the 558-unit Midtown Modern and 219-unit Midtown Bay at Guoco Midtown on Beach Road. When Midtown Modern was launched in March this year, average price of units sold was $2,800 psf. The neighbouring condominium, The M, on Middle Road, was launched in February 2020 at an average price of $2,450 psf. The price differential between the two launches translated to a 14.3% premium for Midtown Modern over The M, notes Han Huan Mei, director of research at List Sotheby’s International Realty.
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The price differential between the two launches translated to a 14.3% premium for Midtown Modern (pictured above) over The M, according to List Sotheby's (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Likewise, units sold in the resale market at the 428-unit Marina Bay Residences have an average price of $2,027 psf over the period of 2020 to end-March 2021. This reflects a premium of 12% over those sold at The Sail, where average resale price was $1,813 psf over the same period, according to Han. “This shows that in the Downtown Core, residential units in integrated development generally have a premium of more than 10% over standalone condominium developments in close proximity.”
The main reason people would be willing to pay a premium for integrated developments is convenience, with shopping at the doorstep and seamless connectivity to other parts of Singapore via the MRT, notes Han. “People buying for investment know that integrated developments are very popular with expatriate tenants,” she adds.