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March 12, 2015 3:20 PM SGT

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SINGAPORE: EL Development’s Lim Yew Soon wants to offer homebuyers more compact, affordable units, but they get some flexibility in terms of how they want to use the space.

Lim Yew Soon knows all too well that shoebox apartments are highly popular with homebuyers because of their low absolute prices.

Yet, none of the units at his recently launched 660-unit Symphony Suites in Yishun are shoebox units.

Instead, the managing director of niche developer EL Development is trying to interest homebuyers in the project’s compact family units, which he believes would better maximise space efficiency, given the site’s plot ratio under URA’s current rules.

“We do not have balconies, roof terraces or private enclosed spaces, so we can bring down the [absolute prices] of units,” points out the 40-year-old.

Typical units are compact two-bedroom apartments of 689 sq ft, which are priced from $671,000 to $758,000.

Three-bedroom units are 786 and 797 sq ft, and cost $767,000 to $868,000.

“Premium” three-bedroom units, which are slightly larger, are 893 and 915 sq ft, with prices from $883,000 to about $1 million.

Meanwhile, 1,023 sq ft, four-bedroom units are priced from $968,000 to about $1.1 million.

While the units have been sized down, the developer is offering buyers some flexibility in terms of space usage.

For instance, buyers have the option of an open or enclosed kitchen.

They can also choose to have a bedroom removed to accommodate a dining nook or study corner.

There is also an option to reduce the size of the utility area by removing the toilet and yard in order to carve out a little more space for the living area, says Lim.

The common bedrooms can fit a queen-sized bed, but the walking space will be a little tight, he admits.

Most families with children will want a bedroom that can fit a wardrobe, a study table and a single or bunk bed.

The master bedroom can accommodate a queen-sized bed and has an en suite bathroom that is equally compact.

Instead of a balcony in the master bedroom, there will just be a full-height glass window.

“People may complain about not having a balcony, but I think this is more practical,” says Lim.

“And if they feel that the livingdining area is too small, they can buy a fourbedroom unit and take out one of the bedrooms to have a larger living area.” The idea was to keep the overall unit size small and efficient, without any unutilised space.

He adds, “Some may think it’s too compact, but we are focusing on functionality and affordability.”

Affordability The preview of Symphony Suites was held on the weekend of Jan 31 and Feb 1, and it was officially launched on Feb 7 and 8.

About 60 units out of a total of 180 released have been sold.

The average price is said to be just over $1,000 psf.

The most popular units were the two-bedroom ones, observes Lim, with buyers being a mix of owner-occupiers and investors.

“Because of the difficulty in getting a loan under the TDSR [total debt servicing ratio], the smaller the absolute amount, the easier it is for people to commit to a purchase,” he says.

Given its location, Symphony Suites drew residents from the northern region, namely Yishun, Woodlands and Sembawang.

It is located in the vicinity of a new industrial cluster zoned for clean and light industries, with North Point Bizhub and A’Posh Bizhub, as well as the upcoming North View Bizhub, next door.

Yishun itself is being reinvigorated over the next five years as part of the URA Master Plan 2014.

Besides Khoo Teck Puat Hospital, which opened in 2010, other amenities include new malls, hawker centres and cycling paths.

Transport infrastructure will also be enhanced, with the North-South Expressway expected to be completed in 2020, which will reduce travelling time to the CBD.

The train station for the future cross-border rail link to Malaysia will be located at Woodlands Regional Centre, which is being positioned as the northern gateway to Singapore.

Woodland s Regional Centre will also be the hub for the development of the North Coast Innovation Corridor, which will have some 7.5 million sq ft of new commercial space and more than 100ha of development land.

The North Coast Innovation Corridor, which will span Woodlands, Sembawang, Seletar and Punggol, is expected to be a hub for R&D activities for firms in the electronics, pharmaceutical and clean energy sectors.

“There will be a lot of activity in the North Coast Innovation Corridor as it develops into an employment centre and people move there to work and live,” says Ong Choon Fah, chief operating officer of DTZ.

EL Development has taken a big bet on the transformaiton of Yishun, having beaten four others to win the 221,239 sq ft development site at the junction of Yishun Avenues 6 and 9 in a government tender last April.

The purchase price for the site was $278.8 million, or $405 psf per plot ratio (psf ppr).

At the time, analysts estimated the break-even price would be $925 to $940 psf, and the selling price would be at least $1,000 psf.

Competition The relatively subdued sales at Symphony Suites so far could be due to buyers holding back for now, as Frasers Centrepoint is expected to launch its North Park Residences in Yishun Central in March.

“I don’t rule out the possibility of buyers waiting to see what North Park Residences will be priced at before committing to a purchase,” says Phylicia Ang, executive director of residential services at Savills Singapore.

North Park Residences will sit on top of Northpoint City, and will be integrated with the future bus interchange and linked to the Yishun MRT station.

There will be a community club, expanded shopping area at Northpoint Shopping Centre, as well as many other amenities.

Frasers Centrepoint won the 99-year leasehold commercial-cum-residential site in September 2013 with a bid of $1.43 billion.

There will be 12 blocks of 920 units, ranging from studio units of 431 sq ft to five-bedroom units of 1,432 sq ft, at North Park Residences.

“The response has been quite good, as there are very few such integrated developments with direct train access all the way to the CBD and Orchard Road without having to switch trains,” says Ivan Hoh, managing director of PropNex International, the marketing agent for North Park Residences.

Market indication is that prices of units at North Park Residences will be average $1,300 psf.

EL Development’s Lim is philosophical about the competition in Yishun.

“There may be some overlap, especially in the investor segment,” he says.

“But we each have our own target audience.

For families looking at threeand four-bedroom units, perhaps they will find our project more affordable.” He intends to have his showflat open throughout the Chinese New Year holidays to make the project more accessible to potential buyers.

The developer aims to provide residents with a complimentary shuttle service to the Yishun MRT station when the 99-year leasehold condominium is completed in 2019.

Shoebox to suburbia Lim ventured into the property development business in 2006, when he spun off EL Development from construction company Evan Lim & Co, which was founded by his father and is now managed by his brothers.

His claim to fame was the launch of the 72-unit Illuminaire on Devonshire in prime district 9.

The project featured mainly one-bedroom units from 441 sq ft and two-bedroom units from 635 sq ft.

They were snapped up in a matter of days, with an average price of $1,700 psf.

Illuminaire was launched in April 2009, just two months after the preview of Alexis @ Alexandra by Fission Group and Yi Kai Development.

At the 293-unit Alexis, the majority were one-bedroom units of 366 to 527 sq ft, and they were snapped up within three days.

The success ushered in a new generation of shoebox apartments called “Mickey Mouse units”.

Shoebox units became a popular way for developers to keep units affordable without reducing the average price psf.

These units proved to be a hit with investors as well, especially HDB dwellers, as the absolute prices amounted to less than $1 million.

Suites @ Guillemard, launched in October 2009, offered one-bedroom units of 258 sq ft, the equivalent of the smallest suite in a luxury boat plying the Mekong River.

Despite the public outcry, all 72 units in the freehold development on Lim Ah Woo Road in Geylang were snapped up in a day.

The project was completed last year.

URA subsequently imposed a minimum size of 40 sq m (430 sq ft) on one-bedroom units.

The stock of completed shoebox units (50 sq m or smaller) is expected to balloon from 2,400 units as at end-2011 to 11,000 by end-2015, according to a URA circular in September 2012.

In order to limit the proliferation of shoebox units in suburban condo projects, URA introduced a new formula for developers to calculate the maximum units they can build in a project.

The formula capped the overall average unit size in a development to 70 sq m (754 sq ft), equivalent to the size of a threeroom HDB flat.

The rule took effect from November 2012.

Developers found themselves in a dilemma with the implementation of the new regulation: The more shoebox apartments they introduced into a project, the more four- or five-bedroom units and penthouses they needed to add on the other end of the spectrum to keep the overall average unit size at 754 sq ft.

“We will be creating more problems for ourselves as we could end up selling out all our shoebox units, but be unable to clear the penthouses or four- or five-bedroom units,” explains EL Development’s Lim.

That led to his decision to exclude shoebox units and penthouses from Symphony Suites.

Prior to Symphony Suites, the other significant suburban condo project undertaken by EL Development was the 810-unit La Fiesta on Sengkang Square.

The launch of the project in January 2013 coincided with the announcement of a hike in the additional buyer’s stamp duty (ABSD).

This led to a flurry of buyers and agents rushing to get option agreements signed before midnight when the higher stamp duty kicked in.

To date, the project is substantially sold, and its 431 sq ft, one-bedroom units were the first to be snapped up.

The unsold units, which number more than 20, are mainly the large four-bedroom, dual-key apartments that range from 1,345 to 1,765 sq ft.

“When it comes to large-scale projects, we are prepared for things to be a bit slow,” says Lim.

“You can’t expect to move units by the hundreds in today’s market.”

This article appeared in the City & Country of Issue 664 (Feb 16) of The Edge Singapore.

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