Prices at Scotts Square sink below $3,000 psf
By Tay Hock Meng
/ The Edge Property |
The two most recent transactions at Scotts Square saw prices at the luxury condominium on prime Scotts Road fall below $3,000 psf for the first time in the 8½ years since the project was launched. On Nov 23, a 624 sq ft one-bedroom unit on the 20th floor changed hands for $1.85 million ($2,963 psf). Another similar-sized unit on the 12th floor was sold for $1.8 million ($2,883psf), according to a caveat lodged on Nov 20. Ron Teo, associate team director of PropNex Realty, is said to have brokered the sale of the unit on the 20th floor on behalf of the buyer, a Singaporean investor. The buyer of the unit on the 12th floor is also believed to be a Singaporean investor. “This represents a good buying opportunity,” says Teo. “I haven’t seen prices of freehold one-bedroom units located near the Orchard MRT station fall to such levels.”
Will prices of units at Scotts Square fall further?
A lot will depend on the holding power of the individual sellers, say agents.
Prior to these two transactions, a 947 sq ft two-bedroom unit on the 34th floor changed hands for $3.45 million ($3,642 psf) in September, according to a caveat lodged then. A 1,227sq ft unit on the 21st floor fetched $4.04 million ($3,291 psf). Both were resale units. The previous owner of the unit on the 34th floor purchased it for $3.93 million ($4,154 psf) in August 2007 when the project was launched. Therefore, he realised a loss of 12%. The seller of the unit on the 21st floor bought it for$3.74 million ($3,050 psf) in a sub-sale in November2008 during the global financial crisis. He saw a slight gain of 7.9%.
However, the two sellers of the one-bedroom units in November saw losses of more than 20%. The unit on the 20th floor was purchased in August 2007 for $2.38 million ($3,818psf). Therefore, the recent sale at $2,963 psf represented a loss of 22.4%. Meanwhile, the unit on the 12th floor was purchased in a subsale for $2.45 million ($3,928 psf) in September2007. Selling the unit at $2,883 psf meant a loss of some 26.6%. Both sellers were believed to have been foreigners.
Compared with their historical purchase prices, the losses are of course much higher. However, when compared with the seller’s asking price of $1.99 million for the unit on the20th floor, the transacted price of $1.85 million represents a fall of just 7.04%, says Teo.
Prior to the recent spate of resales at Scotts Square, developer Wheelock Properties is said to have sold nine units at a roadshow in Hong Kong in May. These were one-bedroom units sold at prices ranging from $2.08 million to$2.25 million, or $3,283 to $3,605 psf, according to caveats lodged.
According to Wheelock’s 3QFY2015 results released last month, 277 units at Scotts Square had been sold as at end-September, or 82% of the total of 338 units in the project. The average transacted price for the units is $4,000 psf. The developer has also rented out 31 of the unsold units at an average monthly rental rate of $5,100.
The unit on the 20th floor is currently tenanted at $5,000 a month, with the lease expiring by end-2015. The new owner is putting the unit up for lease with an asking rent of $5,200 a month. If the asking rent is achieved, based on the purchase price of $1.85 million, the gross rental yield will amount to 3.4%.
The latest resales at prices below $3,000 psf are unlikely to have an impact on the developer’s selling prices for the remaining units, says Samuel Eyo, managing director of Singapore Christie’s International Real Estate. The discounted prices could be due to the “inauspicious unit number” and the facing of the units in that stack, reckons Eyo. “In the resale market, a lot has to do with the negotiations between buyer and seller.”
However, the individual unit owners at Scotts Square will have to brace themselves for potential buyers who are likely to use the latest deals as “comparable transactions” in negotiating for lower prices, concedes PropNex’s Teo. “A lot will depend on the holding power of sellers at Scotts Square,” he adds.
Freehold condo projects near Orchard MRT station completed after 2000
Project Name | Tenure | Completion | Avg Price ($ psf) | Sales Volume | Avg Rent ($ psf pm) | Rental Volume | Rental Yield (%) |
|---|---|---|---|---|---|---|---|
Freehold | 2011 | 3,222 | 7 | 7.3 | 41 | 2.7 | |
Freehold | 2010 | 2,001 | 1 | 4.9 | 10 | 2.9 | |
Freehold | 2004 | 1,822 | 1 | 4.8 | 11 | 3.2 |
Source: URA, The Edge Property
Interested in condos / apartments at Scotts Square and nearby projects? Click here
This article appeared in the City & Country of Issue 707 (Dec 14, 2015) of The Edge Singapore.
Follow Us
Follow our channels to receive property news updates 24/7 round the clock.
EdgeProp Telegram
EdgeProp FacebookSubscribe to our newsletter
Top Articles
Search Articles