Do older condos in CCR offer better yields?

By Michael Lim

/ The Edge Property |

June 27, 2016 2:30 PM SGT

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The launch of CapitaLand’s 268-unit Cairnhill Nine and Oxley Holdings’ 149-unit The Rise at Oxley in March have refocused investors’ attention on prime District 9. OUE’s deferred payment scheme for the 462-unit OUE Twin Peaks and Wheelock Properties’ 15% discount and 15% additional buyer’s stamp duty (ABSD) assistance package for the 84-unit Ardmore Three in April further shone the spotlight on projects in prime Districts 9 and 10.

That seems to have awakened interest in the Core Central Region as a whole. CCR comprises the traditional prime Districts 9, 10 and 11, as well as Marina Bay and the CBD core of District 1 and Sentosa Cove in District 4. Based on the top 50 property searches by users of The Edge Property website from the beginning of the year to June 19, homebuyers are casting their nets beyond the new launches to include older condominium developments such as the 176-unit freehold St Thomas Suites developed by Frasers Centrepoint Ltd and completed in 2010; the 1,111- unit The Sail at Marina Bay by City Developments Ltd that was completed in 2009; and the 89-unit Serenade @ Holland, which was completed by Wing Tai Holdings 12 years ago.

A 2,013 sq ft, four-bedroom unit on the 19th floor of one of the 36-storey twin towers at St Thomas Suites was sold for $1,788 psf, below the developer’s selling price of $1,878 psf in 2010

The renewal of interest in St Thomas Suites is not surprising, according to Alan Cheong, head of research at Savills Singapore. “The latest transacted price of $1,788 psf for St Thomas Suites is well below that of new launches and is one of the lowest psf prices for a freehold development in District 9,” he says. In fact, the $1,788 psf price for the 2,013 sq ft, four-bedroom unit on the 19th floor of one of the 36-storey twin towers is even lower than the resale price of $2,118 psf achieved in 2012, and even below the developer’s selling price of $1,878 psf in 2010.

In comparison, a 1,603 sq ft, four-bedroom, mid-floor unit at Cairnhill Nine fetched $3.89 million ($2,424 psf) in May. And Cairnhill Nine is 99-year leasehold. At the freehold The Rise @ Oxley, a 1,163 sq ft, three-bedroom unit was sold for $2.45 million ($2,108 psf), while a 1,399 sq ft, three-bedroom unit at the 99- year leasehold OUE Twin Peaks fetched $3.6 million ($2,573 psf) recently. The $1,788 psf price recently achieved at St Thomas Suites is therefore a 15% discount compared with the unit at The Rise @ Oxley, 26% below the unit at Cairnhill Nine and a 30% discount to the unit at OUE Twin Peaks.

“Those who are active today are investors who have done their math and are pouncing on value buys, which will position them for the next property upturn,” says Cheong.

In the Holland Road neighbourhood of District 10, the two most-searched condos were the 99-year leasehold Serenade @ Holland and freehold The Trizon at Ridgewood Close. The 89-unit Serenade @ Holland was developed by Wing Tai Holdings and completed in 2004, while the 289-unit The Trizon was developed by Singapore Land and completed in 2012.

A 1,507 sq ft, three-bedroom unit at Serenade @ Holland was sold for $1.75 million ($1,160 psf). The asking rent for a similar-sized unit is around $4,500 a month.

“Buyers [see] Serenade @ Holland purely as a rental yield play, as it is one of the most affordable developments in the vicinity,” says Samuel Eyo, managing director of Singapore Christie’s International Real Estate. At Serenade @ Holland, a 1,507 sq ft, three-bedroom unit fetched $1.75 million ($1,160 psf) earlier this month. The asking rent for such a unit has been listed at $4,500 a month, which translates into a rental yield of 3.1%. In comparison, at The Trizon, a 1,550 sq ft, three-bedroom unit was sold for $2.6 million ($1,677 psf) in December 2015. The unit is available for lease, with an asking rent of $5,700 a month, which translates into a gross yield of 2.6%.

Interest has returned to The Sail @ Marina Bay as prices are now below the level in 2008/09 when the 99-year leasehold condo was completed. “It is the most high-profile condo in Marina Bay, being the biggest and the first residential development there,” says Christie’s Eyo. “It is no surprise that it is one of the most-searched condos among both property agents and buyers.”

A 1,313 sq ft, three-bedroom unit at The Sail was sold for $2.18 million ($1,656 psf) in June. The psf price is even lower than the $1,900 achieved by the unit in November 2009.

The latest transaction at The Sail was for a 1,313 sq ft, three-bedroom unit, which was sold for $2.18 million ($1,656 psf) in June. A similar-sized unit was listed with an asking rent of $6,000 a month recently, which means that if the rent is achieved, the yield will be 3.3%. The recent psf price is even lower than that achieved by the unit in November 2009, when it was sold at $1,900 psf. “The Sail is sought after by investors as there is always a ready pool of tenants who want to live near Raffles Place and Marina Bay, and at today’s prices, the yield is attractive,” points out Eyo.

Top 50 searches in Core Central Region from Jan 1 to June 19

Project	Property Type	Land Tenure	Completion	Total No of Units
26 NEWTON	Apartment	Freehold	2016	180
6 DERBYSHIRE	Condominium	Freehold	Uncompleted	168
ARDMORE THREE	Condominium	Freehold	2014	84
AVALON	Condominium	Freehold	1999	82
CAIRNHILL CREST	Condominium	Freehold	2004	248
CAIRNHILL NINE	Apartment	99 Years Leasehold	Uncompleted	268
CYAN	Condominium	Freehold	2014	278
D'LEEDON	Condominium	99 Yrs From 08/04/2010	2014	1,703
GLENTREES	Condominium	999 Yrs From 17/09/1885	2005	176
ICON	Apartment	99 Yrs From 29/01/2002	2007	646
LATITUDE	Condominium	Freehold	2010	127
LEEDON RESIDENCE	Condominium	Freehold	2015	381
LOFT @ STEVENS	Apartment	Freehold	2013	44
MARINA BAY RESIDENCES	Condominium	99 Yrs From 14/07/2005	2010	428
MARINA ONE RESIDENCES	Apartment	99 Yrs From 01/07/2011	Uncompleted	1,042
NEWTON SUITES	Apartment	Freehold	2007	118
ONE BALMORAL	Condominium	Freehold	Uncompleted	91
ONE DUCHESS	Apartment	999 Yrs From 27/12/1875	Uncompleted	13
ONE SHENTON	Apartment	99 Yrs From 14/10/2005	2011	341
ORANGE GROVE RESIDENCES	Condominium	Freehold	2009	60
ORCHARD SCOTTS	Condominium	99 Yrs From 08/11/2001	2008	387
OUE TWIN PEAKS	Condominium	99 Yrs From 10/05/2010	2015	462
PARC EMILY	Condominium	Freehold	2008	295
RESIDENCES @ EVELYN	Condominium	Freehold	2007	208
RIVERGATE	Apartment	Freehold	2009	545
RV EDGE	Apartment	Freehold	2013	108
SCOTTS SQUARE	Apartment	Freehold	2011	338
SOLEIL @ SINARAN	Condominium	99 Yrs From 23/10/2006	2011	417
SOPHIA RESIDENCE	Condominium	Freehold	2014	272
SPRING GROVE	Condominium	99 Yrs From 01/12/1991	1996	325
ST THOMAS SUITES	Condominium	Freehold	2010	176
THE CLIFT	Apartment	99 Yrs From 28/04/2004	2011	312
THE COAST AT SENTOSA COVE	Condominium	99 Yrs From 11/04/2006	2009	249
THE IMPERIAL	Condominium	Freehold	2006	187
THE LAURELS	Condominium	Freehold	2013	229
THE OLIV	Apartment	Freehold	2013	23
THE ORCHARD RESIDENCES	Apartment	99 Yrs From 13/03/2006	2010	175
THE PATERSON	Condominium	Freehold	2004	88
THE PIER AT ROBERTSON	Apartment	Freehold	2006	201
THE SAIL @ MARINA BAY	Apartment	99 Yrs From 12/08/2002	2008	1,111
THE SERENADE @ HOLLAND	Condominium	99 Yrs From 05/06/2001	2004	89
THE TRIZON	Condominium	Freehold	2013	289
THOMSON 800	Condominium	Freehold	1999	390
TRILIGHT	Condominium	Freehold	2012	205
UE SQUARE	Apartment	929 Yrs From 01/01/1953	1997	495
URBAN RESORT CONDOMINIUM	Condominium	Freehold	2013	64
VALLEY PARK	Condominium	999 Yrs From 21/06/1877	1997	728
VISIONCREST	Apartment	Freehold	2007	265
VIZ AT HOLLAND	Condominium	Freehold	2008	165
WATERFORD RESIDENCE	Apartment	999 Yrs From 01/07/1841	2010	118

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