‘Piccadilly Grand effect’ on upcoming launches

EdgeProp Singapore

May 12, 2022

SINGAPORE (EDGEPROP) - Over the weekend of May 7 and 8, joint-venture developers City Developments Ltd (CDL) and MCL Land sold 315 out of 407 units (77%) at Piccadilly Grand. Average price for the city fringe project located at Farrer Park was $2,150 psf, setting a new price benchmark for the area. The stirring sales at the launch of Piccadilly Grand last weekend is expected to set the tone for the market for the rest of the year, reckons Mark Yip, CEO of Huttons Asia. “With construction costs spiking, project launches at prices close to $2,000 psf will likely become the norm,” he predicts.

The 298-unit [email protected], located in the Mountbatten area in the East Coast, previewed last weekend (May 7 and 8). It attracted a crowd of more than 4,200 visitors to the project sales gallery, according to property developer Bukit Sembawang Estates. The project is located on Arthur Road, off Mountbatten Road in prime District 15.

Units at [email protected] range from one- to four-bedroom apartments. Indicative prices start from $1.084 million ($2,190 psf) for a 495 sq ft one-bedroom unit. Two-bedroom units from 624 sq ft are priced from $1.43 million ($2,292 psf), while three-bedroom units from 1,119 sq ft are upwards of $2.327 million ($2,080 psf). Four-bedroom units from 1,518 sq ft have prices north of $3.39 million ($2,233 psf).

With prices starting from $2,080 psf, [email protected] MB is priced attractively to sell,” says Lee Sze Teck, senior director of research at Huttons Asia. The 99-year leasehold [email protected] is located in the Mountbatten Road enclave, known for its conservation bungalows. It is just a three- to four-minute walk to the upcoming Katong Park MRT Station on the Thomson-East Coast Line and a 10-minute walk to the Mountbatten MRT Station on the Circle Line.

East Coast Park and Singapore Sports Hub are also a short distance away, while Marina Bay Financial District is a 12-minute drive from [email protected] MB. “Foodies can look forward to a myriad of food options from hawker fare to trendy cafes and bakeries,” adds Huttons’ Lee. Top schools in the vicinity include EtonHouse International Pre-School, Tao Nan Primary School, Tanjong Katong Girls’ School, Tanjong Katong Secondary School and Canadian International School.

The weekend of May 14 and 15 will mark the preview of another District 15 project, Atlassia, in Joo Chiat by K16 Developments. “Atlassia is located in an area steeped in history and heritage,” notes Lee. “Buyers will be buying into a piece of history as Atlassia is a mixed-use development with residential dwelling units and conservation shophouses. It is probably the only project with conservation shophouses in 2022.”

The 31-unit boutique development is within minutes’ drive to East Coast Park, Singapore Sports Hub, the CBD and Marina Bay. The Joo Chiat area is being rejuvenated, with trendy cafes and restaurants opening in the neighbourhood. Indicative prices for the freehold project are likely to be around $2,000 psf.

Providing ‘strong support base’

However, it’s not just city-fringe or Rest of Central Region (RCR) projects that have crossed the $2,000 psf benchmark. It looks like upcoming residential projects in the Outside Central Region (OCR) are heading in that direction too.

One of them is UOL Group’s upcoming 372- unit, 99-year leasehold condominium at Ang Mo Kio Avenue 1, which is expected to preview sometime in early June. The other is GuoLand’s Lentor Modern at Lentor Central, a 99- year leasehold, mixed-use development integrated with the Lentor MRT Station on the Thomson-East Coast Line.

Ismail Gafoor, CEO of PropNex, sees the prices achieved at Piccadilly Grand providing “a strong support base” for the projects at Ang Mo Kio Avenue 1 and Lentor Central. He attributes this to the lack of new supply in the OCR. “The profile of buyers for Ang Mo Kio Avenue 1 and Lentor Central will be very different from those at Piccadilly Grand,” he adds.

At Piccadilly Grand, for example, many of the buyers were investors. Hence, the one- and two-bedroom units were fully sold. Even the three-bedroom units were almost fully taken up. “We believe the buyers for Ang Mo Kio Avenue 1 and Lentor Central would be predominantly owner-occupiers and families with children of school-going age,” notes Gafoor.

Integrated developments and premiums

Piccadilly Grand isn’t just a residential project with a commercial podium on the first level (Piccadilly Galleria). According to Tan Wee Hsien, MCL Land CEO, “Piccadilly Grand’s attributes as a rare integrated development with direct access to Farrer Park MRT Station and excellent location so close to the city centre are keys to its success”. The project is also linked underground to City Square Mall, the largest mall in the area.

“Integrated developments generally command a premium compared to pure residential developments,” says PropNex’s Gafoor. He points to other integrated developments which had also commanded a premium over other residential projects in the surrounding area at the time of their launch. Examples include Allgreen Properties’ Pasir Ris 8 in the OCR, where prices crossed $2,000 psf for the two-bedroom units when the project was launched last July, while the average price is $1,600 psf. The 487-unit project is 89% sold to date, based on caveats lodged.

Sengkang Grand Residences by joint-venture partners CapitaLand and CDL, launched in 2019, achieved a high of $1,915 psf last year. The 680- unit project in the OCR is 99.4% sold and has achieved an average price of $1,729 psf, accord- ing to URA Realis.

Even Watertown at Punggol, when it was launched a decade ago in 2012, commanded a premium. A total of 748 out of 992 units (75.4%) were sold within the first month of launch at an average price of $1,178 psf. Prices even hit a high of $1,654 psf in February 2013, when a four-bedroom unit on the 11th floor was sold, according to a caveat lodged. The median price in the first four months of this year is $1,469 psf, based on URA Realis. Watertown is located in the OCR.

Meanwhile, in the RCR is the 667-unit The Woodleigh Residences, which was launched in 2019. To date, the project is 91.6% sold, with an average price of $2,021 psf. The highest psf price achieved for the project is for a two-bedroom unit of 646 sq ft, which fetched $2,468 psf in April last year.

Blurring of price differentiation by market segment

The integrated development in the RCR that has shattered all records is CanningHill Piers, a joint-venture project between CDL and CapitaLand Development. The 696-unit development at Clarke Quay was 77% sold at its launch weekend last November. The project achieved an average price of $3,000 psf, and to date, it is 88% sold.

Although CanningHill Piers falls under RCR, its positioning and pricing was equivalent to that of luxury projects in the Core Central Region (CCR). “The differentiation in pricing across the CCR, RCR and OCR has blurred,” says Huttons Asia’s Yip. “Prices tend to be defined by the locational and project attributes rather than by market segment.”

Various transformation and connectivity plans by the government also play a part in boosting the prices in different market segments, according to Yip. This was certainly the case for Piccadilly Grand, with the government announcing rejuvenation plans for the nearby Farrer Park Field just a day after Piccadilly Grand previewed. It would see the launch of 1,600 Build-To-Order public flats that will be integrated with sports and recreation- al facilities over the next three years.

“With Piccadilly Grand, we have created a future icon in this rapidly transforming neighbourhood,” says Sherman Kwek, CDL group CEO. “And we are excited to be part of the district’s rejuvenation into a vibrant residential estate with sports and recreational facilities.”