Home owners trade up in style

Source : The Edge - 15 Mar 2009
Owner-occupiers of older condominiums and HDB properties are capitalising on affordable pricing to upgrade to new and larger apartments
THE BEST TIME to buy property, says K S Quek, a 45-year-old businessman who runs an electronic equipment servicing company with his wife, “is during a downturn”. The Queks did just that in the last property slump when they bought their current home, a fourth-floor 1,238 sq ft apartment in Savannah CondoPark at Simei Rise in 2003 for just under $600,000. The 648-unit condominium, developed by City Developments Ltd (CDL), was completed in 2005 and is notable for its landscaped gardens, pools and large bronze animal sculptures.
At that time, Singapore was in recession, just as it is now. This time round, the affordable pricing of recently launched 99-year leasehold condos in the suburbs have also presented the Queks with an opportunity to upgrade from their existing condo to a larger, newer apartment. After checking out recent launches, such as the 724-unit Livia condo in Pasir Ris by CDL and the 712-unit The Caspian in Jurong by Frasers Centrepoint, the Queks homed in on an apartment at Double Bay Residences, a 646-unit, 99-year leasehold condo in Simei by developer UOL Group and its privately held sister company Kheng Leong in a 60:40 joint venture.
Image:‘We had done our homework and we were very certain which unit we wanted,’ says Quek of his family’s purchase of a ground-floor four-bedroom, 2,379 sq ft apartment at Double Bay Residences for $1.1 million.
The Queks were one of the first to show up at the preview on March 6. “We had done our homework and we were very certain which unit we wanted,” says Quek. The chosen apartment was a $1.1-million four-bedroom, 2,379 sq ft apartment on the ground floor that comes with a water feature. Having lived in a highrise apartment, Quek looks forward to tending a little garden in his 890 Owner-occupiers of older condominiums and HDB properties are capitalising on affordable pricing to upgrade to new and larger apartments sq ft private enclosed space that was one of the draws of the unit. With three young children aged seven, five and 2½, Quek admits that the lifestyle aspect was one of the key considerations for the purchase.
Quek says the primary consideration was the location — the project’s proximity to the Simei MRT station (but yet not close enough that the noise level will become an issue) and to the Eastpoint Mall.
In terms of layout, “most new condos these days look pretty similar”, admits Quek, but he was sold on the particular unit at Double Bay Residences because of the landed feel of the ground floor apartment and the size of the unit, something that a higher-floor apartment would not offer. “There were only two four-bedroom apartments on the ground floor with these large balconies,” says Quek.
He adds that it’s too early to say whether he will sell his existing condo or lease it out. After all, he has three years to decide as Double Bay Residences is expected to be completed only in 2013. Quek also took up the interest absorption scheme that UOL has tied up with UOB Bank to offer homebuyers of Double Bay Residences. This means that after paying the initial 20% deposit, Quek does not need to pay anything until the Temporary Occupation Permit for the project is obtained, and that is when he needs to start servicing the loan.
About 40% of the buyers at the preview came from Simei, with a huge number also from the other estates in the east, such as Tampines, Bedok and Pasir Ris. Only 12% of the buyers were not current residents in the nearby areas, says Liam Wee Sin, chief operating officer of UOL Group.“There’s a pool of latent demand from [owners of] the older condos in the vicinity. And, having stayed in their condos for 10 years, they want to move to a newer condo.”
Double Bay Residences will therefore set a new benchmark in terms of product and pricing, notes Doris Ong, vice-president of project marketing at ERA Network, joint marketing agents with Knight Frank for the project.
The main attraction is that Double Bay Residences is the newest development in Simei Street 4, where the last launch was over a decade ago, says Liam. Next door is Simei Green, a 602-unit executive condo developed by NTUC Choice Homes and completed in 1999, while behind it is Tropical Spring, a 242-unit condo also developed by NTUC Choice Homes, which was completed in 2002/03. Modena, a 230-unit condo, also of the 99-year leasehold variety in Simei Street 4, was developed by OUB Centre Ltd and completed in 2001/02.
The most popular units in Double Bay Residences have been the 2+study bedroom apartments of 1,001 to 1,765 sq ft. Those were sold at prices ranging from $600,000 to $720,000, says UOL.
However, beyond the affordability factor influencing property purchases is one of aspiration, notes Liam, as it was the higher-floor units, and even the penthouses, that were taken up faster than the lower-floor units. In the lower-floor apartments, the large units were snapped up first.
Of a total 10 penthouses in the development, ranging from 3,000 to 3,500 sq ft, three have been snapped up at prices ranging from $1.7 million to $1.9 million. There are 44 groundfloor units with a mix of one- to fourbedroom apartments — 17 were sold during the preview at prices ranging from $660,000 to $1.2 million.
INVESTOR APPEAL: CHANGI BUSINESS PARK, THE FOURTH UNIVERSITY
Seventy percent of the buyers at Double Bay Residences during the preview were owner-occupiers, with investors making up the balance, observes ERA’s Ong. They are banking on its proximity to Changi Business Park, where banks like Citibank, DBS and Standard Chartered will be relocating their back office and global support services functions to built-to-suit, multimillion-dollar complexes sometime this year and the next, to make renting out their apartments an attractive investment proposition.
Adding to the appeal of Changi Business Park is the mixed-use project won by developer Frasers Centrepoint in a joint venture with JTC Corp’s wholly owned subsidiary, Ascendas Land. The mixed-use development will contain not just business space, but also a retail mall and a 300-room hotel that’s likely to be completed by 2013.
A further attraction in the area is the fourth university coming up near Changi Business Park on the land previously allocated for the University of New South Wales’ Singapore campus. The university is expected to open by 2015.
Rental rates in Simei seem to be holding up. HDB four-room flats in the area are being rented out at $1,700 to $1,800 per month, while five-room flats are fetching $1,800 to $2,000 per month, notes Ong. As for private condos in the neighbourhood, three-bedroom apartments in the likes of Simei Green and Eastpoint Green have a going rental rate of $2,900 to $3,200 per month.
Assuming a rental rate of $3,000 a month for three-bedroom apartments today, this means investors in Double Bay Residences can expect rental yields of 4% to 5%. “This yield is achieved at a time when the [Changi Business Park] is not even fully developed and the fourth university is not even up yet,” comments Peter Ow, executive director of residential marketing with Knight Frank.
CAPITALISING ON INDOOR-OUTDOOR LIVING
In the past, buyers often perceived that large private enclosed spaces or generous sized balconies and patios ate into built-up areas, resulting in smaller living rooms and tiny bedrooms, for instance.
That’s a popular misconception, says Ow. “For all condo developments, the built-up area for, say, a three- or a four-bedroom is pretty similar either on the ground or higher floors. The difference is that on the ground floor, you have the benefit of having a larger balcony garden or patio. And, increasingly, there are people who want that larger space to enjoy the indoor-outdoor lifestyle.”
Double Bay Residences is regarded as one of the new mass-market condos that provide such generous private enclosed space (PES), with timber deck and water features for the three- and four-bedroom groundfloor apartments, according to Chang Huaiyan, founder of landscape architectural firm Salad Dressing and the landscape architect for Double Bay Residences. “It will bring the concept of indoor-outdoor living to new heights,” he adds. “It will add a new dimension to one’s apartment and act as an extension of the living room.”
Budgets for landscaping a balcony garden vary from $1,000 for those who just want potted plants and flowers, to $4,500 for those looking at installing a koi pond and other features, estimates Chang. “A lot will also depend on the kind of outdoor furniture and accessories that the owner chooses,” he adds.
The duplex apartments at Double Bay Residences have generous PES that comes with a swimming pool and timber deck, while the roof terraces of penthouses comes with a Jacuzzi and trellis, says Chang.
For penthouses, owners can spend anywhere from $15,000 to $100,000 on their roof terraces, says Ow. Some have turned their rooftop terraces into places for entertaining friends and family, and have fitted them out with an outdoor kitchen, complete with professional grill, stove, fridge and sink. Still others have turned them into private sanctuaries with plants, flowers and herbs and water feature.
MID-TIER CONDOS WITH LIFESTYLE APPEAL
This is not Chang’s first collaboration with UOL or Kheng Leong. He is also the landscape architect for UOL’s other condo projects such as Meadows@Peirce on Upper Thomson Road, located on the former Green Meadows site and near Peirce Reservoir.
Meadows@Peirce is likely to be launched in 2Q or 3Q2009, says UOL Group’s Liam. While the low-rise maisonettes have been torn down, the high-rise tower has been retained and will be reconfigured. This is to free up a large area for amenities and also landscaping. All Liam would say is that it would be a “very naturedriven project”. “The Green Meadows [site] is also a unique location in the Upper Thomson area,” he says. “It’s also set in the midst of a private landed housing estate.”
Chang’s Salad Dressing is also the landscape architect for Kheng Leong’s condo, Domain 21 on Delta Road, which was completed last year, and Oasis Garden, Kheng Leong’s new launch in the East Coast. Liam says the lifestyle factor at Double Bay Residences in Simei is similar to that of One-North Residences and Southbank (the former Eng Cheong Tower) at North Bridge Road.
One-North Residences is located off North Buona Vista Road, is across the street from Nepal Park and next to One North Park. It will be completed later this year. To Liam, Double Bay Residences is similar to One-North Residences in terms of location. Double Bay Residences is near Changi Business Park and the fourth university, while One-North Residences is within one-north, home of the Biopolis bio-medical cluster and research as well as Fusionopolis, the infocomm cluster.
As for Southbank, its location right next to Crawford Bridge and fronting Rochor Canal and Kallang River is the draw. The condo will be completed this year. The Kallang River also provides the backdrop for cyclists and those who want the waterfront lifestyle, notes Liam.
For homebuyers at Double Bay Residences, apart from relaxing on a daybed and enjoying a nice Cuban cigar in one’s own private garden, one can always climb on a bike and cycle through the park connectors in the east coast on weekends, says Liam.