MCC Land launches The Poiz Residences
By Cecilia Chow
/ The Edge Property |
The project will be the first mixed-use development linked to the Potong Pasir MRT station for the Singapore-based Chinese developer.
Having lived in Singapore for 19 years, MCC Land managing director Tan Zhiyong knows the heartlands better than most true-blue Singaporeans. After all, the property developer’s office is located in Bukit Batok, and it has developed a handful of residential projects in Yishun in the north and Tampines in the east, as well as participated in joint-venture projects in Pasir Ris, Sembawang and Woodlands.
The mainland Chinese-turned-Singapore permanent resident makes it a point to visit every site offered for sale under the Government Land Sales programme. When the government launched a site at Upper Serangoon Road/Meyappa Chettiar Road for sale last year, Tan realised its potential when he visited it. “In the past, as someone new to Singapore, my perception was that Potong Pasir was very far away,” says the 46-year-old in Mandarin.
What he found was a site located within a low-density neighbourhood on the city fringe, conveniently linked to the Potong Pasir MRT station. “I told myself I must win the site,” recalls Tan. And MCC Land did just that in August last year when it trounced 14 other bidders to win the 99-year leasehold, 173,830 sq ft site with the highest offer of $471.6 million or $775 psf per plot ratio (psf ppr).
On Nov 14 and 15, MCC Land previewed the new project in Potong Pasir, and more than 1,000 people visited the sales gallery and show flats. Called The Poiz Residences, it contains 731 units in 18-storey blocks sitting on top of a 50,000 sq ft retail-cum-lifestyle complex named The Poiz Centre. The project will be linked directly to the adjacent Potong Pasir MRT station. The retail complex will contain 84 strata- titled shops.
The Poiz Residences will sit on top of The Poiz Centre, a three-storey retail mall that is connected
to the Potong Pasir MRT station
Holding on to shops
Instead of selling off the strata retail units, Tan has decided to hold on to them as he wants to position the mall and put in the right tenant mix. Besides convenience stores, laundromats and cafés, he wants to introduce new-to-market retail brands and a business centre catering to residents working from home. Only 10% of the commercial space (5,000 sq ft) is allocated to F&B outlets, so choosing the right F&B tenants is also important. “We want to make sure we have shops that cater for the needs of residents living in the area,” emphasises Tan.
There aren’t any shopping malls in the Potong Pasir area. The nearest full-fledged shopping mall is nex, which has 600,000 sq ft of space with 385 shops and is located two MRT stops away from Potong Pasir. Government land sites on the city fringe that are mixeduse and integrated with an MRT station are becoming rare, says Tan.
“The advantage of The Poiz Centre is that it will be managed by the developer,” says Mohamed Ismail Gafoor, CEO of PropNex Realty. “A mall that’s managed by a single owner — whether the developer or a property fund — will generally have a stronger theme and better tenant mix. When you strata title and sell off the units from the start, you can cream off the profits, but you lose control over the tenant mix. How many mobile phone accessory shops or nail spas do you need in one place?”
However, by having the commercial units subdivided into 84 strata units, MCC Land has the option to sell the individual units in the future, once the mall is fully tenanted and has stabilised, says Ismail. The shop units will then be able to fetch higher values as they are tenanted, and there is traffic flow, he adds.
Resilience of mixed-use projects
Residences in mixed-use developments that are linked to an MRT station generally see strong demand, evidenced by the sales at North Park Residences and Bedok Residences, says Jack Chua, CEO of ERA Realty. “The convenience of an MRT station and having shops just below your home is something that people value today. And that’s what The Poiz Residences will have.” ERA and PropNex are the joint marketing agents of The Poiz Residences.
In the vicinity, no other residential or mixeduse project has a direct link to the Potong Pasir MRT station. Sennett Residence, located across the road, has 332 condominium units and three shops. Adjacent to Sennett Residence is Sant Ritz with 214 residential units. The Venue Residences and Shoppes, located at the corner of Serangoon Road and MacPherson Road, has 266 residential units and 28 strata shops for sale. All three projects were launched in 2013.
As at end-October, 99 units at The Venue Residences had been sold, with the latest median price at $1,446 psf, according to URA data. Based on caveats lodged, four units at The Venue Shoppes have been sold with prices ranging from $5,252 to $5,702 psf. Meanwhile, Sennett Residence has just 22 unsold residential units with the latest median price achieved of $1,227 psf. Sant Ritz has 27 unsold units with the latest transaction at $1,304 psf. “There are not many unsold units in these projects,” Chua says.
‘Poised to sell’
Prices have yet to be finalised, but indications are that units at The Poiz Residences are likely to be priced at an average of $1,380 psf. On top of that, the developer is expected to offer buyers some early bird discounts. Sales will start on the weekend of Nov 28 and 29.
The smallest units in the project are the one-bedders, which start from 420 sq ft and are estimated to be priced from $600,000, while two-bedroom units are sized from 581 sq ft and priced from $800,000. About 65% of the units in the project are made up of one- and two-bedders. The one-bedroom units will appeal to investors given the absolute quantum in the $600,000 range, says Chua.
“I’ve done a market research of the surrounding condos and found that most of the one-bedroom units are larger than those at The Poiz Residences, and therefore, the quantum prices are higher,” says MCC Land’s Tan.
For instance, at Sennett Residence, the most recent transaction of a one-bedroom unit was that of a 570 sq ft unit that fetched $780,000 ($1,368 psf) in July last year, according to a caveat lodged. At Sant Ritz, the smallest one-bedroom units are 527 sq ft in size and the most recent sale was last year, when a unit went for $866,660 ($1,643 psf). Meanwhile, the smallest one-bedroom units at The Venue Residences measure 495 sq ft and the most recent sale of a unit was in February last year for $762,000 ($1,539 psf).
Prices of residential units in mixed-use schemes that are linked to MRT stations tend to hold their values better and are more rentable, says PropNex’s Ismail. Based on current asking rents and estimated selling price, he reckons investors of one-bedroom units can still expect to see gross rental yields in the 4% range.
Following the preview of The Poiz Residences, Tan says he has received many enquiries on the three-bedroom units from families. This is because the project is located near a cluster of good schools, namely St Andrew’s Village. And there are also potential upgraders from the Potong Pasir HDB estate.
To cater for the demand from families, The Poiz Residences comprises 202 three-bedroom units with sizes ranging from 775 to 1,765 sq ft and prices starting from $1 million. There are also 52 four-bedroom units from 1,464 to 1,528 sq ft and four penthouses of 3,767 sq ft and 3,800 sq ft.
“With one-bedroom units starting from about $600,000 and three-bedroom units from about $1 million, the quantum price for units at The Poiz Residences is considered very affordable,” says ERA’s Chua.
The initial take-up rates at recent project launches have been slower as buyers are taking their time to select their units and scrutinise unit layouts, and are more price-sensitive, according to property agents.
“There aren’t any other exciting projects to round off the year,” says PropNex’s Ismail. “And this project is poised to do well given its location, mixed-use element and MRT link.”
‘Localised’
MCC Land’s Tan is of the view that the underlying housing demand is still strong. However, it has been suppressed by the property cooling measures, he says. “With more than 80% of the population living in HDB estates, there’s still a latent desire to upgrade to private property.”
Despite a more challenging environment, Tan feels that Singapore is still a good market to be in. “Our thinking is quite different from other Chinese developers who may be entering Singapore for the first time,” he says. “We are more localised as we’ve been here since 1996.”
According to Tan, most Chinese developers are used to bidding for large sites and developing township projects of several thousand units in China. “So, when they come to Singapore, they find it hard to adapt to the smaller sites available here,” he adds. That partly explains why many mainland Chinese developers went next door to Iskandar Malaysia instead, as they were given the opportunity to develop large-scale developments, similar to what they have done in China. They include China Vanke, Country Garden, Greenland Group and R&F Properties. However, they did not realise that the supply-demand dynamics there are quite different, explains Tan.
“We did look at Iskandar Malaysia, but we will wait and see,” he concedes. “Our business partner, Hao Yuan Investment, is already there.” Hao Yuan acquired a 36.8-acre land parcel at Danga Bay in Iskandar Malaysia for RM1.6 billion in December 2013. It has tied up with Iskandar Waterfront Holdings on a 60:40 basis to develop an RM8 billion ($2.6 billion) mixed-use development, with MCC Land roped in as a project manager.
This is not the first collaboration between MCC Land and Hao Yuan. In Singapore, MCC Land has been involved in the marketing and project management of Hao Yuan’s projects, such as the fully sold 435-unit The Nautical private condo in Sembawang, which is completing this year; the 653-unit Forestville executive condo (EC), which was launched last year and had only 30 unsold units as at end-October; and the upcoming 645-unit private condo project on Dundee Road in the city fringe area of Queenstown, which Hao Yuan had bid for in a government tender and won in June for $483.18 million ($871 psf ppr).
Entrenched in Singapore
MCC Land, too, has been active in bidding for sites in Singapore. In April, it won a 99-year leasehold residential site at Parcel D in Tampines Avenue 10 with a bid of $227.78 million ($483 psf ppr), which was the highest of 12 bids. The 1.57ha site can potentially yield 490 residential units.
The new project in Tampines Avenue 10 is likely to be launched sometime in 2H2016. MCC Land has engaged Geneva-based Group8 Architects to design the project in collaboration with Singapore-based AGA Architects. “The design is going to be very futuristic,” says Tan.
MCC Land is not new to the area. Two years ago, it beat nine other developers to win its first site (Parcel B) in Tampines Avenue 10 with an offer of $289.7 million ($562 psf ppr). The project was launched as the 597-unit The Santorini in April last year. As at end-October, 199 units had been sold with the latest median price at $1,211 psf.
Tan is confident of the long-term prospects of Tampines, as it is the most established regional centre. The east is also undergoing a major transformation, he adds. The United World College East Campus in Tampines has opened, and so has the fourth public university, the Singapore University of Technology and Design.
In terms of jobs, Changi Business Park is a draw, with many financial institutions having moved their global support and backroom functions there. The new Tampines Town Hub, which will feature many amenities for residents in the area, is scheduled to open progressively from end-2016. Tan is also excited about the opportunities that will open up when the government redevelops Paya Lebar Air Base.
When MCC Land first ventured into property development in 2010, Tan focused on acquiring sites and developing projects in Yishun and Sembawang, where land prices were relatively inexpensive then, he relates.
When he set up MCC Land in Singapore in 1996, it was mainly involved in construction projects by its sister company, China Jingye Engineering Corp. Completed projects include HDB estates in Yishun, Bukit Batok and Bedok, as well as Universal Studios in Resorts World Sentosa. China Jingye is also the main contractor for MCC Land’s projects. MCC Land is an offshoot of Metallurgical Corp of China, a conglomerate engaged in engineering, procurement and construction for the metallurgical industry, resource exploration and real estate development. The Beijing-headquartered MCC Land is listed on both the Hong Kong and Shanghai stock exchanges.
Over the past five years, MCC Land has launched 3,821 private condo and EC projects. They include The Canopy, Canberra Residences and One Canberra in Yishun, The Santorini in Tampines and TRE Residences in Geylang East, in a joint venture with Sustained Land and Yu Zhisong of Greatview Development. It has a pipeline of 2,451 units that will be made available for sale over the next 12 months. “Our market share in Singapore has been increasing,” says Tan.
Like other developers, Tan has also explored diversification beyond Singapore’s borders. Apart from Iskandar Malaysia, he had explored opportunities in Kuala Lumpur, Jakarta and Bandung in Indonesia, as well as Australia, India and Japan. “I’m taking my time to look for suitable opportunities and assess the risks of the different markets,” he says. Indonesia, with a population of 255 million people, appears to be the most attractive. About 160 million people are living on Java Island alone, he adds.
And despite the current market slowdown, Tan believes that Singapore presents the best bet. “The market is very sustainable. I don’t foresee any major upheavals in the near future,” he says.
Looking for more apartments / condos near Potong Pasir MRT? Click here
This article appeared in the City & Country of Issue 704 (Nov 23, 2015) of The Edge Singapore.
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