Tag Archives: Novena medical hub

Balestier gains investors’ favour with good location

BALESTIER’S unsavoury reputation as a red-light district seems a thing of the past.

Investors are now closing in on the area thanks to rejuvenation efforts and the nearby fast-growing Novena medical hub.

A spate of new projects has enlivened the area, while new amenities have been injected with the completion of the integrated hotel-park complex comprising Zhongshan Mall, Zhongshan Park, and the Days and Ramada hotels.

Hotels and home fixture shops might dot its streets, but the area still retains its charm with the preservation of art deco shophouses dating back to the 1930s.

But consultants said Balestier’s location on the city’s fringe is the main draw for investors, as expatriates on tight budgets are being forced out of the city centre.

“Within close proximity of city areas such as Newton and Novena, Balestier provides a compelling sought-after alternative to potential homebuyers with its city-fringe location,” said Knight Frank research head Alice Tan.

The latest project there is the 48-unit Viio @ Balestier, developed by Techkon Commercial.

Three 926 sq ft two-bedroom units, which come with a study, have been sold at the mixed development since its launch about two weeks ago, at an average price of $1,600 per sq ft (psf). Its 30 retail units are not on sale yet.

At the freehold Ascent @ 456, 12 of the 28 units have been sold for an average of $1,477 psf as at last month, according to official data. Cosmo Loft, also a freehold project, has moved five of its 56 units for an average of $1,775 psf.

Prices of new condos in Balestier have enjoyed steady gains over the past two years, experts noted. Average prices have increased about 9.8 per cent from $1,378 psf in 2012 to $1,513 psf last year. In the first six months of the year, it rose by 2.7 per cent to $1,554 psf.

However, resale prices have eased from $1,362 psf last year to $1,256 psf in the first half of 2014.

Mr Ong Kah Seng, director at R’ST Research, said the slide was in line with the downbeat property market, as home owners prefer holding out for a better offer.

At the 104-unit Domus in Irrawaddy Road, prices have averaged $820 psf in the past year, while average monthly rents have been about $5.10 psf.

Balestier rentals have eased 4 per cent on average over the past year, as more landlords face competition from completed condos in the suburbs, said Mr Ong.

However, he predicted that owners who hold on to their units for at least seven more years should still be able to expect about 10 per cent in capital appreciation.

The Mezzo in Balestier sees prices hit $1,417 psf

The most recent condominium to be completed in the Balestier neighbourhood is Soilbuild Group’s The Mezzo located along Balestier Road. The Mezzo is a 28-storey, mixed-use development, with a six-storey commercial podium and 127 apartments occupying 22 higher floors. The apartments are a mix of one and two bedroom units, with sizes starting from 560 sq ft and around 840 sq ft respectively.

The project is a redevelopment of the former Ruby Plaza, a mixed development. When it first previewed in March 2009, one-bedders were reportedly priced from $540,000 and two-bedroom units were from $715,000. The developer had also offered buyers a 6% annual rental guarantee for the first two years, which kicks in after the temporary occupation permit (TOP) date. The residential units are fully sold. The Mezzo obtained its TOP in February, and according to property agents, up to 13 units have changed hands on the secondary market over the last two months.

In the week of April 5 to 13, there were three transactions recorded at The Mezzo, based on caveats lodged with URA Realis. The most recent transaction was for an 840 sq ft, two-bedroom unit on the 24th level that changed hands for $1.19 million ($1,417 psf). Another 840 sq ft, two-bedroom apartment on the 20th level was sold for $1.04 million ($1,239 psf). The original buyer paid $766,000 ($912 psf) for the unit in June 2009. Meanwhile, a 775 sq ft, two-bedroom unit on the 19th level of the tower recently changed hands for $1.02 million ($1,316 psf). The seller purchased the unit for $720,000 ($929 psf) in June 2009 when the project was first launched and realised a capital gain of roughly 41.7% in just under three years. In March, two 560 sq ft, mid-level, one-bedroom apartments changed hands for $738,000 ($1,318 psf) and $755,000 ($1,349 psf) respectively. An 840 sq ft two-bedroom unit on the 25tth level was sold in March for over $1.1 million ($1,316 psf). According to Bryan Koh, a property agent with ERA Realty, asking prices of units in The Mezzo are in the range of $1,300 to $1,500 psf today.

There are only about 20 one-bedroom apartments in The Mezzo, and these are popular among single expatriates, says Koh. Most of these apartments are leased out at rental rates of $3,500 per month and above. Two-bedroom apartments at The Mezzo are commanding rental rates of $4,000 to $4,500 a month, estimate agents. Based on the achieved selling prices of the two-bedroom units in sub-sales, and prevailing rental rates, the gross rental yield works out to about 4.7% to 5.2% per annum. Hence, the rental yields achieved by those who have purchased units on the secondary market are actually below the 6% rental guarantee by the developer to the initial buyers, points out an agent who declined to be named.

While the resale market has been relatively slow, ERA’s Koh is confident that investor interest in the area will grow, given its proximity to the CBD and the Novena medical hub, with the latest completion being the Mouth Elizabeth Novena Hospital and Specialist Centre. The area is also seeing an increase in the number of new hotels, especially with the upcoming opening of the Wyndham Hotel Group’s Ramada and Days Inn hotels within the Zhong Shan Park, which will have a total of 390 rooms. Zhong Shan Park is developed by Hiap Hoe and sister company, Superbowl. “There’s a lot happening in the area and all these upcoming developments will surely impact the property prices there,” adds Koh.

Another development that is seeing investor interest building up as it nears completion is Roxy-Pacific’s Nova 88, which is scheduled to obtain TOP 3Q 2012. The development is located on Bhamo Road, off Balestier Road, and contains a mix of one to four-bedroom apartments. When the project was first launched in late 2008 early 2009, prices ranged from $900 to $990 psf. Based on the latest caveats lodged and downloaded from URA Realis as at April 25, the most recent recorded transaction was the sub-sale of a 603 sq ft apartment on the eighth floor. The previous owner paid $610,163 ($1,012 psf) for the unit when it was launched in early 2009, and sold it for 824,000 ($1,367 psf), recognising a capital appreciation of 35.1% over three years. Today, one-bedroom units of 506 sq ft at Nova are asking for $742,000 ($1,466 psf), according ERA’s Koh. “Although the builtup for Nova 88 relatively small, the project is still favoured by investors for its rental prospect. With an estimated rental yield of about 4%, owners can expect to fetch rentals up to $3,700 a month for a two-bedroom unit,” Koh adds.

One street away on Prome Road is Roxy-Pacific’s other boutique condo project, Nova 48, which was completed last year. The most recent transaction at the 48-unit freehold condo was the sub-sale of a three-bedroom apartment on the eighth level. The 1,066 sq ft unit was sold for more than $1.29 million ($1,215 psf) on April 5.

Meanwhile, on the other side of Balestier Road, located along Jalan Rama-Rama is the 206-unit De Royale, a freehold project completed in 2006 and developed by Hoi Hup Holdings. Based on the caveat lodged, a three-bedroom apartment on the 22nd floor of the 36-storey condo tower was sold for $1.5 million ($1,171 psf) earlier this month. The seller purchased the 1,281 sq ft unit for $860,000 ($671 psf) in April 2007, and thus enjoyed a price appreciation of 74.4% in five years.

In the vicinity of Thomson Road is City Developments’ The Arte, a 336-unit condo located on Jalan Raja Udang and completed two years ago. A 1,625 sq ft unit changed hands on the resale market for $1.9 million ($1,169 psf). The previous owner paid just $811 psf for the unit in May 2009. When The Arte was first launched in early 2009, the initial average price was around $800 psf.

Next door to The Arte is another significant development, the 280-unit Vista Residences by giant property developer, Far East Organization. Located on Jalan Datoh, off Balestier Road, the project is expected to be completed next year. The most recent transaction was for a 904 sq ft unit that changed hands in a sub-sale for $1.176 million ($1,301 psf) earlier this month. When the project was first launched in 2Q 2009, initial prices ranged from $960 to $1,070 psf.

The Balestier area is also likely to benefit from a spillover of demand from the neighbouring Newton, Novena and Thomson areas in prime district 11, observes Andy Goh, president of AG Prestige Homes, who specialises in the prime Orchard Road districts. Prices of new launches in district 11 tend to be north of $2,000 psf. An example of this is the 67-unit Suites@Newton located along Surrey Road, which was launched earlier this year. Units have been sold at an average of $2,100 psf.

Source: DoneDeal