Revival of investor interest in one-north?

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The 200ha one-north business park located off Buona Vista has become the epicentre for research & development, knowledge-based industries and start-ups. It has also become an area for multinational companies to set up their leadership training centres - for instance, Unilever Four Acres and P&G's Innovation Centre, as well as for campuses of business schools such as INSEAD and ESSEC.
As more companies relocate to one-north (master planned by JTC Corp as a work-live-play environment) and the workforce in the area increase In recent years, Investor Interest In condominiums in the vicinity has gone up in tandem. The opening of The Star Vista mall and The Star Performing Arts Centre in 2012, which is also the location of the New Creation megachurch, has made the area more vibrant, especially on weekends.
Currently, there are only two condo projects within one-north, namely the 366-unit The Rochester, which is part of a mixed-use development, and the 405-unit One-North Residences. Both are 99-year leasehold condos.
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The Rochester was launched by United Engineers (UE) Ltd at the peak of the market in July 2007. The average price or units sold then was $1,300 psf. This was about 30% higher than the average price of $900 psf at which One-North Residences was launched at just three months earlier in March 2007.
The higher launch price of The Rochester was due to the fact that it sits across the road from Buona Vista MRT station and The Star Vista mall. The mixed-use scheme comprises a condo tower and a 271-room hotel-cum-serviced apartment tower called Park Avenue Rochester, which is connected to The Rochester Mall. The project was completed in 2011.
From November to February, The Rochester units transacted had hovered in the $1,400 to $1,465 psf range. The exception was a 1,862 sq ft. four-bedroom unit on the 15th floor of the condo block that was sold at Knight Frank's auction In December for $2.36 million ($1,267 psf). It was a mortgagee sale. The previous owner paid close to $2.29 million ($1,228 psf) for the unit in November 2007.
The most recent transaction at The Rochester was that of an 861 sq ft, one-bedroom unit on the 22nd floor that changed hands for $1.2 million ($1,400 psf), according to a caveat lodged on Feb 23. The unit was last sold for close to $1.197 million ($1,391 psf) in August 2007. Hence, the owner saw a mere 0.65% capital appreciation in more than seven years.
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Units at The Rochester are popular with expatriate tenants owing to the convenience of its location in the vicinity of shopping malls and MRT station, say property agents. Therefore, one-bedroom units at The Rochester generally fetch rental rates or about $4,000 a month, with rental yields hovering in the 3.5% range. One-bedroom units at The Rochester have asking rents in the range or $5,500 to $6,200 a month, according to listings on PropertyGuru.com.sg.
One-North Residences was the first condo development to be launched in one-north and it generated plenty of excitement, especially among investors. Jointly developed by UOL Group, Kheng Leong and Low Keng Huat, the project was sold out within a few months. The residential development comprises twin 12-storey residential blocks, and was completed in 2009. It is located within a 10-minute walk of the Buona Vista and one-north MRT stations.
Units at One-North Residences had been trading at a wider price range from $983 to $1,597 psf over December to February. The $983 psf was for a 1,119 sq ft ground floor unit that changed hands for $1.1 million in December. The previous owner paid $880,168 ($786 psf) for the unit when the project was first launched in March 2007. Hence, he saw a capital appreciation of some 25 % in eight years.
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The most recent transaction at One-North Residences was for a 614 sq ft, one-bedroom unit on the fifth floor of the neighbouring block. It changed hands for $980,000 ($1,597 psf), according to a caveat lodged on Feb 24. This amounts to a 29.6% capital appreciation from April 2007, when the previous owner purchased the unit for $756,000 ($1,232 psf). The seller was believed to be a Singaporean investor, while t he recent buyer is said to be a foreigner who purchased the unit for his child who is studying in Singapore, according to the property agent who brokered the sale.
One-bedroom units at One-North Residences are equally sought after, with monthly rental rates in the range of $3,400 to $3,800. Meanwhile, tow-bed- room units post rents of $4,700 to $5,200 per month.
According to the property agent, there has been a lot of inquiries from local investors for units at One-North Residences and The Rochester since last month. Around 40% of the units in both developments are said to be tenanted, with owner occupiers making up the rest. Most expatriate tenants tend to be those working in one-north, students as well as members of the faculty at the business schools and corporate training centres. The area is also accessible to the CBD and National University of Singapore, as well as being close to Holland Village and Chip Bee Garden, a popular dining and retail enclave.
This article appeared in the City & Country of Issue 668 (Mar 16) of The Edge Singapore.

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