Spruced-up Balestier set to create buzz

http://www.straitstimes.com/Invest/S...ry_286044.html

Oct 5, 2008

property

Spruced-up Balestier set to create buzz

This is the last in a four-part series on the property scene in or around 'colourful' spots of Singapore

By Jessica Cheam


Home buyers hankering after a place in or near the city but daunted by the high prices could be pleasantly surprised by the choices coming up in one area: Balestier.

The district, once known as a crime-infested area, has been spruced up recently, with private condos sprouting up.

While police raids of its massage parlours still make the news sometimes, the area's old-world charm is undeniable and its proximity to the city centre makes it attractive.

Because of its colourful past, it is often viewed as the poorer cousin of Novena and Newton, whose properties command higher prices though they are just next door.

But Balestier is now up-and-coming, with the Urban Redevelopment Authority (URA) marking it as one of Singapore's important 'identity nodes' and implementing plans for its rejuvenation.

URA recently awarded the last piece of state land in Balestier to a Hiap Hoe joint venture for hotel and commercial development. The developer also has to build and manage a public space called Zhongshan Park, meant to boost the profile of the Sun Yat Sen Nanyang Memorial Hall in Ah Hood Road, off Balestier.

Analysts say the development will add to the vibrancy of the area, already famed for eateries specialising in local fare such as duck rice. Balestier is also home to numerous budget hotels such as the Fragrance and Hotel 81 chains, popular with tourists and student travellers.

As at the end of last year, there were about 600 hotel rooms in Balestier. Another 50 rooms are due for completion this year, not including the new hotel site, said URA.

In addition, Balestier is dotted with old walk-up flats around Jalan Datoh and Jalan Rama Rama that attract clients such as foreign workers and students because of the cheap rents, say analysts. Rents are around $2,000 a month - cheap for a near-city location, says Savills director Ku Swee Yong.

He added that some of these flats can be bought for around $800 per sq ft (psf) or less. However, many are making way for new freehold condos, especially following a spate of en bloc deals last year.

Property developer City Developments (CDL), for example, snapped up a host of sites such as The Albany, Lock Cho Apartments and Comfort Mansion. Down the road, it also bought Concorde Residences, Balestier Court and Bright Building.

Mr Ku said prices at CDL's yet-to-be-launched condo, The Arte at Thomson, could even hit $1,400 to $1,500 psf - the top range for the area - if the market is good.

Newer existing condos such as The Marque @ Irrawaddy and The Verve went for around $1,100 to $1,200 psf in the first half. But in recent months, prices at The Verve have slipped just below $1,000 psf.

In contrast, Novena condos such as Lucida and the Soleil @ Sinaran fetch about $1,400 psf.

On the other side of Balestier, there are newer condos along Martaban Road, such as Ecoville and Medge, going for $883 to $958 psf.

Investors can also consider Balestier's historic shophouses, with as many as 150 gazetted for conservation. Some boast architectural styles that date back to the 1840s.

Property agent Frank Lim is selling a row of five adjoining two-storey shophouses opposite Shaw Plaza for $14 million. In total, they bring in rents of $59,000 a month - which give a yield of around 5 per cent, say property analysts.

This level is reasonably attractive and can be improved if investors choose the right tenant mix, said Knight Frank research and consultancy head Nicholas Mak.

Lighting shops have emerged as a major theme in the area's tenant mix. There are also eateries, karaoke bars, shopping malls and mom-and-pop shops offering goods that run the gamut from vintage sunglasses to coffee beans.

Conservation experts at URA say they have noticed an influx of foreigners renting shophouses and renovating the buildings to live in.

URA is looking into greening the fairly built-up area and exploring ways to make the walking experience along the road 'more conducive', said deputy director of physical planning Tan See Nin.

He noted the number of private homes due for completion by 2011 in Balestier will reach 860 units.

Balestier is home to the Global Indian International School and Curtin University is opening a new campus there next month. It is targeting 5,000 students, with 1,000 enrolled by year's end.

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