Novena district sees increase in interest

Resale transactions are picking up in the Novena neighbourhood of prime district 11. Interest in the area could have been spurred by the launch of the 74-unit SOHO project, 8 Bassein, located on Bassein Road and developed by World Class Land. Previews had started in the last week of April, with 16 units sold by the end of the month at $1,884 to $2,002 psf, according to URA new-home sales figures.

Meanwhile, in the neighbourhood of Bassein Road, Akyab Road and Mandalay Road, freehold condominiums completed in recent years are seeing transactions in the range of $1,300 to $1,400 psf. For instance, at the freehold 61-unit M21 on Mandalay Road, a 1,066 sq ft, two-bedroom apartment on the seventh level of the 18-storey block was sold for $1.5 million ($1,408 psf), according to a caveat lodged on May 22 with URA Realis. In April, another similar sized unit on the 10th level was sold for exactly the same price. Since the start of the year, transaction prices have been hovering in the range of $1,362 to $1,408 psf. M21 was developed by Wee Cho Yaw’s privately held property development arm, Kheng Leong Co, and completed in 2010.

Another development near M21 that was also completed in 2010, is the 102-unit freehold Zedge by developer Macly Group. Recent transactions of small units sized at 484 and 495 sq ft were done at $860,000 ($1,775 psf) and $890,000 ($1,797 psf). The higher price psf is attributed to the units being shoebox apartments.

At the 100-unit The Ansley by Fortune Capital, which was completed in 2004, a 1,281 sq ft unit on the 23rd level of the 25-storey block was sold for $1.68 million ($1,312 psf) last month. The last time the property had changed hands was in 2009 when it was sold for $1.27 million ($991 psf). Prior to that, the unit had been sold in 2007 for $1.2 million ($937 psf). The original owner had purchased the unit for just $940,000 ($734 psf) when the freehold condo project was launched in 2002.

At UOL Group’s Pavilion 11 (a 180-unit freehold condo) on Akyab Road, transactions in the month of March and April were in the range of $1,346 to $1,461 psf. One street away from Mandalay Road is Mimbu Road, and is where Soilbuild Group’s 151-unit Montebleu is located. The condo was completed two years ago and is fully sold. Recently, an 807 sq ft, one bedroom unit on the 29th level of the development changed hands on the resale market for $1.33 million ($1,647 psf). The original owner paid $824,754 ($1,022 psf) for the unit when it was launched in April 2007 and sold it for $998,888 ($1,237 psf) in January 2010, recognising a capital appreciation of 21%. Meanwhile, the buyer who purchased it in the sub-sale enjoyed a 33.1% gain in the most recent deal at $1,647 psf by far the highest price achieved by the condo since its launch.

Closer to the Novena MRT station and in the vicinity of the Novena Medical and Specialist Centres, Novena Square, Velocity and Square Two malls, is the 417-unit Soleil at Sinaran, developed by Frasers Centrepoint and completed last year. Sub-sale of units in the 99-year leasehold condo over the last few months ranged from $1,724 to $1,912 psf. The main appeal of the Novena and Thomson (district 11) area is the lower prices relative to those in the Orchard Road vicinity, primarily districts 9 and 10, where transaction prices are hovering in the $2,300 to $2,500 psf range, says Andy Goh, president of AG Prestige Homes, which specialises in condos in the prime districts. According to Goh, given the relatively lower price psf for district 11 condos, the rental yields for investors tend to be higher compared with condos in the prime Orchard Road districts of 9 and 10. Those locations, however, tend to enjoy higher capital appreciation. Besides rental potential, when it comes to selling, one also has to consider the neighbourhood.

For instance, the site located direcly behind M21 is designated a neighbourhood park by the government. “This is definitely a plus point because having a park next door will guarantee unblocked views, which will be a major selling point in the future, especially in a neighbourhood that’s otherwise densely packed by high rise blocks,” says Goh. The main draw of the Novena enclave is, of course, the medi- cal cluster, says Raymond Tiah, associate manager of Chesney Real Estate. For example, 80% of the units at M21 are tenanted to expatriates. According to Tiah, the Novena area is popular with Indonesians owing to the medical cluster, which has Tan Tock Seng Hospital, Novena Medical Centre and Specialist Centre, as well as the newly opened Mount Elizabeth Novena Hospital by Parkway Holdings. Tiah is currently marketing a four-bedroom, 1,755 sq ft unit at M21 for $2.5 million ($1,408 psf), which is in line with recent transaction prices.

Source: TheEdge – 2012 Jun 14


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