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Thread: Properties that have the most to gain after partial opening of TEL

  1. #1
    Join Date
    Oct 2011

    Default Properties that have the most to gain after partial opening of TEL

    Properties that have the most to gain after partial opening of TEL

    By Elizabeth Choong

    May 17, 2022

    What is the Thomson-East Coast Line?

    The Thomson-East Coast Line (TEL) will bring easier access to the MRT network for residents living in the east region and along the north-south corridor of Singapore.

    Stage 1 stretching from Woodlands North to Woodlands South opened in 2020 and Stage 2 comprising of six stations from Springleaf to Caldecott opened last August.

    Stage 3 (with the exception of Mount Pleasant and Marina South) will open later this year. Stage 4 (with the exception of Founders’ Memorial) is expected to open in 2024, and the remaining two stations in Stage 5 are expected to open in 2025. Mount Pleasant, Marina South and Founders’ Memorial MRT stations are expected to open in tandem with developments in that area.

    Map 1: Thomson-East Coast Line (TEL)

    On the top of many home buyers’ wish list is a MRT station within walking distance, thus giving a boost to prices of nearby properties. Savvy investors should scour listings for opportunistic purchases near MRT stations on the TEL.

    In this article, we will examine the properties near Stages 1 and 2 of TEL. Stay tuned for our analysis of Stages 3 to 5 next week.

    Stage 1: Improving connectivity to Woodlands

    Stage 1 of TEL opened on Jan 31, 2020. According to the Land Transport Authority (LTA), commuters will be able to travel from Woodlands South to Orchard in 35 minutes when TEL is fully operational, instead of the current 50 minutes by MRT and bus.

    Banking on Woodlands regional hub

    Woods Square is an office and retail development that is connected to the Woodlands MRT Station. The development will benefit from the opening of TEL as well as the government’s plans to transform Woodlands into a regional hub. Offices in Tower 1 of Woods Square are for sale, while Far East Organization retained the units in Tower 2 for lease.

    Office units in Woods Square are fetching an average price of $1,883 psf and average monthly rent of $3.40 psf; giving an implied rental yield of 2.1%. There is no requirement to pay additional buyer’s stamp duty (ABSD) and seller’s stamp duty (SSD) when buying commercial properties – an incentive for investors to consider adding commercial properties to their portfolio.

    Affordable resale HDB flats in Woodlands

    Resale HDB flats in Woodlands may be the answer to the housing woes of buyers with a tight budget because prices of resale HDB flats in Woodlands are consistently among the lowest. Additionally, living in Woodlands allows residents to benefit from the improved and affordable connectivity via TEL.

    According to the latest data from HDB, median price in Woodlands was $450,000 (up 4.7% q-o-q) for four-room flats and $530,000 (up 5.0% q-o-q) for five-room flats in 1Q2022. The price growth for flats in Woodlands is higher than the 2.4% q-o-q overall increase, reflecting price appreciation from the opening of the TEL stations. As prices are expected to grow further when the TEL opens fully in 2025, potential buyers may want to act quickly.

    There are 888 HDB flats in Woodlands Glen that obtained MOP in January. In Admiralty Flora and Marsiling Greenview, 1,706 flats will achieve MOP later in May, while 78 flats in Kampung Admiralty will obtain MOP in July.

    Stage 2: Interesting upcoming residential launches

    Stage 2 of TEL connects the Thomson area to the MRT network when it opened on Aug 28, 2021 Interestingly, there are a number of recently awarded government land sale (GLS) sites near two TEL stations.

    Exciting developments in Lentor

    The Lentor Hills Road (Parcel A) GLS site near Lentor MRT Station was awarded in January to a joint venture between Hong Leong Holdings, GuccoLand and TID for $586.6 million ($1,060 psf ppr).The upcoming 600-unit condominium development has an estimated selling price of $2,098 psf.

    GuccoLand won the tender for the nearby Lentor Central GLS site last July for $784.1 million ($1,204 psf ppr). Lentor Modern, comprising 600 residential units and a 96,000 sq ft commercial podium with F&B outlets, childcare facilities and a supermarket, is expected to be built on the site.

    The residential units in the upcoming Lentor Modern are expected to be launched at higher prices than those on Lentor Hills Road (Parcel A), because of its higher land cost and direct link to Lentor MRT Station. Additionally, mixed developments are generally priced higher than pure residential projects.

    Buyers who are unwilling to fork out more can consider the upcoming project at Lentor Hills Road (Parcel A) instead. As Lentor Modern is a short walk away, they will still be able to enjoy the amenities at the retail podium.

    A second alternative will be the upcoming development on Lentor Hills Road (Parcel B) GLS site. The plot, which is located across the road from Parcel A, will be launched for tender later in May. The 116,251 sq ft site with a gross floor area of 244,128 sq ft can yield 265 residential units.

    Parcel B is further from Lentor MRT Station. The less ideal location and intense competition from the two nearby sites may dampen interest from developers, resulting in a lower bid price. This could be good news for potential buyers, because the lower land cost could result in lower launch prices for the residential project.

    Given their proximity to Lentor MRT Station and the lack of new launches in the immediate neighbourhood for the past three years, the upcoming developments are expected to see much interest from buyers.

    Family-friendly Mayflower

    A GLS site along Ang Mo Kio Avenue 1 was awarded last June for $381.1 million ($1,118 psf ppr). A joint venture between UOL Group, Singapore Land Group and Kheng Leong submitted the winning bid.

    The site is walking distance of Mayflower MRT Station and is expected to have 372 residential units. Assuming a profit margin of 20%, the upcoming development has an estimated selling price of $2,187 psf.

    The upcoming development is ideal for nature lovers because it is sandwiched between Bishan-Ang Mo Kio Park and Lower Peirce Reservoir. Kallang River is also nearby. Families with school-going children will also appreciate the six schools that are within a one-km radius.

    Limited significant launches

    The area does not have any launches of large-scale condominium projects since The Panorama along Ang Mo Kio Avenue 2. The 698-unit leasehold development received temporary occupation permit (TOP) in 2017 and has an average price of $1,611 psf.

    The 339-unit leasehold Thomson Grand along Sin Ming Walk received TOP two years earlier and has an average price of $1,494 psf. Thomson Grand also has 22 landed units.

    The only recent launch is a freehold boutique development that is still under construction; it has only 48 units that are all sold. Average price for Lattice One along Seraya Crescent is $1,853 psf.

    Key takeaways

    - Stages 1 and 2 of TEL are up and running, thus allowing nearby residents to enjoy improved connectivity and some capital appreciation. However, the full impact of living near a TEL station is unlikely to be felt until the whole line is open in 2025, indicating potential for further price growth for nearby properties.

    - The area around Lentor MRT Station will be transformed with upcoming launches of two residential developments and a mixed development.

    - The Ang Mo Kio Avenue 1 GLS site, near Mayflower MRT Station, is expected to see much interest after years of limited new supply in that area.

  2. #2
    Join Date
    Oct 2011

    Default Re: Properties that have the most to gain after partial opening of TEL

    New possibilities as TEL gradually opens

    By Elizabeth Choong

    May 25, 2022

    Upcoming stages of TEL

    Picking up from where we left off in our previous article, this article will highlight some interesting developments near Stages 3 to 5 of the Thomas-East Coast Line (TEL).

    Stage 3: Connecting the central and north regions

    Stage 3 of TEL will significantly cut down travel time between the north and central regions of Singapore when it opens later this year. Housing prices are known to be high in the central area, but there are a number of affordable developments near a TEL station just outside Orchard.

    Outstanding Outram Park

    Outram Park MRT Station is one to watch because it is one of the few interchanges that connect TEL to two other MRT lines. Residents living near Outram Park MRT Station can enjoy superior connectivity to all parts of Singapore.

    One Pearl Bank is a landmark development near Outram Park MRT Station. The 774-unit development is slated for completion in 2023. In addition to having a MRT station at their doorstep, residents of the upcoming development are a short drive away from the CBD, Orchard Road and the bohemian Tiong Bahru neighbourhood. Based on caveats lodged with URA, One Pearl Bank is almost 80% sold at an average price of $2,507 psf.

    New condos creating much buzz

    The upcoming Great World and Havelock MRT Stations are only a few stops away from Outram Park MRT Station, giving commuters easy access to three MRT lines. Irwell Hill Residences near Great World MRT Station and Riviere near Havelock MRT Station created much buzz when they were launched.

    Irwell Hill Residences saw 51.5% of its units snapped up during the launch weekend. Current take-up for the 540-unit project is almost 83%, based on caveats lodged with URA. Average price for the leasehold development is $2,816 psf, based on transactions for the last six months. The project is expected to receive temporary occupation permit (TOP) in 2025.

    Model of Irwell Hill Residences

    Buyers with a more modest budget should check out Riviere which has a lower average price of $2,720 psf. Located near Havelock MRT Station and overlooking the Singapore River, the 455-unit development is expected to receive TOP in 1H2023.

    Artist’s impression of the upcoming Riviere

    There are more affordable options near Havelock MRT Station but such developments are older. Average prices for freehold Mirage Tower and leasehold Harvest Mansions are $2,097 psf and $1,189 psf respectively. Both developments received TOP in 1996. Nearby leasehold Emerald Park, which received TOP in 1993, has an average price of $1,264 psf.

    Stage 4: Onboarding the east

    Condominiums along East Coast, with their panoramic sea view, are popular with buyers. The improved connectivity after the opening of Stage 4 TEL in 2024 will give a boost to demand for homes in the area, especially around Tanjong Rhu and Bayshore MRT Stations. En bloc interest may also be spurred for older developments.

    Connecting Tanjong Rhu

    Residents in Tanjong Rhu enjoy beautiful views of the sea and proximity to the city, but suffer from the lack of accessibility to an MRT station. Pebble Bay, Tanjong Ria Condominium and Costa Rhu are the first condominiums to be developed in Tanjong Rhu. All three projects are leasehold developments that obtained TOP in 1997. Average prices for the three projects range from $1,241 psf to $1,517 psf.

    The developments are an excellent choice for those who want to live near the CBD for under $1,600 psf and are willing to compromise on the age of the development. Investors should also consider the developments because of the expected boost in prices after the opening of TEL.

    The developments are also popular with tenants, with at least 72 rental transactions in the last 12 month. Monthly rents for the condominiums range from $2.90 psf to $3.40 psf and rental yields are 2.7% to 2.8%.

    The age of the three developments plus the upcoming Tanjong Rhu MRT Station make the developments candidates for potential en bloc sales. Tanjong Ria Condominium is the most likely candidate because it is the smallest with 168 units, which makes it easier to get consent from sufficient number of owners. Tanjong Ria Condominium will also be more appealing to developers because its smaller size means less capital outlay and risk exposure. Costa Rhu and Pebble Bay have 737 and 510 units respectively.

    Massive developments near Bayshore MRT Station

    A trio of massive condominium developments will benefit from the upcoming Bayshore MRT Station: Costa Del Sol (906 units), The Bayshore (1,038 units) and Bayshore Park (1,083 units).
    The Bayshore, having received TOP in 1996, is younger than Bayshore Park by 10 years. However, The Bayshore is slightly cheaper with an average price of $1,097 psf compared to Bayshore Park ($1,122 psf). This could be because The Bayshore is further from the sea.

    Costa Del Sol is the youngest among the three developments, having received TOP in 2004. Its relative youth could explain why the development has the highest average price of $1,530 psf.

    The Bayshore presents an excellent value proposition, because its average price is not only the lowest among the three developments but also lower than the overall average of $1,181 psf by $84 psf (7.7%). Bayshore Park should not be discounted because its average price is also lower than the overall average by $59 psf (5.3%).

    The three developments are also popular with tenants. Each development has at least 232 rental transactions over the past 12 months, with rents ranging from $2.70 psf to $3.30 psf per month. Rental yields are 2.7% to 3.1%.

    Stage 5: Potential for growth

    The final two stations on TEL are expected to open in 2025. The areas around the stations are lightly populated, but more residents can be expected after the stations become operational. However, population growth in both areas will be restricted by the East Coast Park, Laguna National Golf and Country Club, as well as Tanah Merah Country Club (Tampines course).

    There are 3,349 private residential units and 2,140 HDB flats near Bedok South MRT Station. As for Sungei Bedok MRT Station, there are only 832 private residential units and no HDB flats. Both MRT stations are in the Bedok planning area which has 97,551 residents, with 87% of them being owners.

    Key observations

    - Stage 3 of TEL passes through central Singapore which is already well-served by MRT lines. However, TEL will allow commuters from all parts to the island to travel to central Singapore faster. Commuters will also have a wider choice of routes.

    - The East Coast area is currently underserved by the MRT network. TEL Stage 4 will connect residents in the east to the central and north regions of Singapore. The improved connectivity is expected to give a boost to property prices and en bloc potential.

    - The population near Stage 5 of TEL is expected to grow after the line is operational. However, population growth will be limited by East Coast Park and two golf courses.

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