Property Spotlight: District 4

Investors are turning their attention again to developments in District 4, especially the Telok Blangah and Keppel Bay neighborhoods. With the construction of the 1,040-unit The Interlace at an advanced stage, buying interest has also picked up. Developed by a CapitaLand-led consortium and designed by world-class architect Ole Scheeren, the project is a redevelopment of the former Gillman Heights, a privatized HUDC estate in Telok Blangah. The project is pitched at the mid- to upper-end of the condominium market, and contains a mix of two- to four-bedroom apartments and penthouses. The 99-year leasehold condo is scheduled for completion sometime next year.

Only mainly large units are left for sale at The Interlace, according to David Neubronner, head of residential project sales at Jones Lang LaSalle (JLL), and the developer is pricing them at an average of $1,500psf. As at end-October, 737 units or 70,9% of the units have been sold by the developer, with the latest median price achieved at $1,294psf.

Meanwhile, those who bought units when the project was launched in late-2009/early 2010 at prices from $900 to $1,000psf are offloading them on the secondary market as it approaches completion. Sub-sale prices achieved over the last two months have ranged from $1,096to $1,353psf, according to caveats lodged in October and November. For instance, a 1,464sqft, three-bedroom unit on the seventh floor was sold in a sub-sale for $1.98 million ($1,353psf). according to a caveat lodged with URA Realis in November. The original owner purchased it from the developer in April 2010 for $1.5 million ($1,024psf), thus realizing a capital appreciation of 32%.

Meanwhile, a 1,550sqft, three-bedroom unit on the eighth floor in another block recently changed hands in a sub-sale for $1.89 million ($1,218psf). The seller purchased it for just $1,003psf two years ago, thus enjoying a capital appreciation of 21.4%. Owners who bought their units two years ago are now putting them on the secondary market with price tags of $1,300 to $1,400psf, says Neubronner. At such prices, they still get a capital upside of 20% to 30%, he estimates.

However, for those who plan to hold on to their units at The Interlace, Neubronner reckons that, based on an estimated rental rate of $4psf per month, they are likely to achieve rental yields of about 5%, relative to the more recent buyers where the yields for their units will likely be 3% to 4%.

Meanwhile, at the 969-unit Caribbean at Keppel Bay, a handful of units have been sold in November at prices ranging from $1,561 to $1,735psf based on caveats lodged to date. The 99-year leasehold condo project was completed in 2004.

The most recent caveat registered with URA Realis was for the sale of an 893sqft, two-bedroom unit on the sixth floor of one of the blocks for $1.55 million ($1,735psf). The previous owner paid just $671,175 ($751psf) for the unit seven year ago, hence seeing its price increase by 2.3 times over that period.

Elsewhere at Caribbean at Keppel Bay, a 1,227sqft, three-bedroom unit on the eighth floor of another tower recently changed hands for $1.86 million ($1,516psf). Three years ago, the same unit was sold for $1.73 million ($1,410psf), according to a caveat lodged with URA Realis.

Caribbean at Keppel Bay is popular with expatriate tenants and investors, with rental rates hovering from $5 to $6psf per month, according to JLL's Neubronner. This means, based on today's selling prices, the gross rental yield is likely to be compressed to 3% to 3.5% per annum.

Meanwhile, also in the Telok Blangah neighborhood, Bukit Sembawang Estates has substantially sold its freehold Skyline Residences, which is still under construction. To date, around 80% of the 283 units at the high-end condo project have been sold at an average price of $2,000psf. The last recorded transaction captured by URA Realis was in August - a 1,346sqft, three-bedroom unit on the 22nd level was sold for $2.82 million, or $2,096psf. "Skyline Residences stands out for its freehold status and hence it commands a premium," says Neubronner.

 

 

Source: THEEDGE SINGAPORE

The wife and I first visited The Interlace's sales gallery around this time of the year back in 2009, when the average price for this project was around $1,000psf. We were not particularly impressed by the furnishing (homogenous-tile flooring for a supposedly upper-end project) and the fully-enclosed bathroom (no ventilation). But looking at the current median price of about $1,300psf, what a difference 3 years make!

Click on links below to read our review of The Interlace:
http://sgproptalk.blogspot.sg/2010/04/interlace-showflat-review.html
http://sgproptalk.blogspot.sg/2009/12/interlace-1st-preview_1348.html

Click on link below to read our previous review of Skyline Residences:
http://sgproptalk.blogspot.sg/2011/07/skyline-residences-review.html