CBD living set to pick up momentum

LIVING in the bustling Central Business District has caught on, with plenty of property launches in the area in recent years.

Many people love the convenience of being just five minutes from work, but some have grumbled at a lack of amenities. There are no schools, supermarkets and shopping centres in close proximity, they say.

But this is set to change with more mixed developments in the pipeline, experts say.

Take, for instance, GuocoLand’s 1.7 million sq ft mixed-use development, Tanjong Pagar Centre.

It will boast a tower of Grade A office space, 181 luxury serviced apartments called Clermont Residence and shops. The project will be linked to the 202-room Clermont Singapore hotel.

So far, 14 out of 54 units launched have been sold, at an average price of $3,055 per sq ft (psf).

Over at Marina Bay, all eyes are on the 3.67 million sq ft integrated project Marina One, jointly developed by Singapore’s sovereign wealth fund Temasek Holdings and its Malaysian counterpart Khazanah Nasional.

The 1,042-unit project is expected to go on the market in the second half of the year, priced at about $2,800 psf to $3,000 psf.

“Investors who buy small units can expect keen leasing interest from mid- to senior-level expats who might be on limited housing allowances but still want a conveniently located property,” said Mr Ong Kah Seng, director of R’ST Research.

Other new developments launched include the 202-unit 76 Shenton, which has moved units at an average price of $1,959 psf, according to data from Square Foot Research.

The 280-unit Altez in Enggor Street has sold 229 units, at an average price of $2,390 psf, while 215 homes have been snapped up at the 360-unit Skysuites@Anson for $2,603 psf on average.

Units were sold at a median price of $2,618 psf at new launches in the five months to May, rising from a median price of $2,303 psf in the same period a year ago, according to HSR Research.

This boom in downtown living has its roots back in 1995, when the Urban Redevelopment Authority (URA) singled out the lack of a residential population as the business district’s key weakness, noted DTZ’s research head Lee Lay Keng.

The URA then set about introducing city living to the area.

After that, the first residential projects completed were the 646-unit Icon by Far East Organization, which obtained its Temporary Occupation Permit in 2007; and the 168-unit Lumiere, which was completed in 2010.

Resale prices of units at these older projects have held steady, noted Mr Ong, staying flat in the past year.

“Resale prices were able to hold in 2013 due to strong leasing demand, although rents are moderating,” he said.

“Most investors feel that there is a ready pool of tenants, despite more competition than before.

At Icon, 91 leases were secured at a monthly median rent of $6.69 psf in the first quarter, while Lumiere had 17 leases at a monthly median rent of $5.90 psf.

Rental yields in the area are about 4 to 4.5 per cent, well up on the islandwide rental yields of 3.8 per cent, added Mr Ong.

“In the longer term, as plans for the Southern Waterfront City under the 2013 Masterplan are implemented, we expect that this will add further impetus to the rejuvenation of the Tanjong Pagar area,” said Ms Lee.

“As the current CBD is extended towards Tanjong Pagar, this will help to support rental and capital values in the area.”

Source : STProperty

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