30/04/2021
Integrated developments: Withstanding the test of time
Source: 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.
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.”
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.
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.
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.
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.
