Why integrated developments command a price premium

August 19, 2022

More people are willing to pay a premium for mixed-use developments integrated with an MRT station. What is the appeal of integrated developments?

According to Alice Tan, head of consultancy at Knight Frank Singapore, an integrated development is a mixed-use development with a residential component and significant commercial component, seamlessly connected to a transport node and public spaces.

“Generally, when integrated developments are launched, developers will build a 20% to 25% premium over other private condos in the same area,” says Tan, who was speaking at the EdgeProp Singapore NDP Master Plan Master Class webinar series on Aug 13, which featured the Beach Road-Bugis area and the Lentor area.

New luxury offerings

In the Beach Road-Bugis area, two four-bedroom units on the 29th and 30th floors of Midtown Modern set new psf price highs of $4,617 psf and $4,783 psf respectively when they were sold in July, based on caveats lodged. The two units of 1,808 sq ft each can be amalgamated into a duplex, five-bedroom penthouse of 3,616 sq ft. The 29th-floor unit fetched $8.35 million, while the 30th-floor unit was sold for $8.65 million, bringing the total to $17 million.

The duplex penthouse is part of six such units at Midtown Modern launched in early July under the Sky Bungalow Collection by GuocoLand. Prior to this, the sole penthouse, a 3,520 sq ft, five-bedroom simplex, was snapped up at launch for $14.83 million ($4,213 psf) a year ago.

Midtown Modern is linked underground to the Bugis MRT Station, an interchange for the Downtown and East-West Lines. The 558-unit Midtown Modern is an extension of the Guoco Midtown integrated development located across Beach Road. The $2.4 billion Guoco Midtown has a 30-storey Grade-A office tower; a five-storey Midtown Hub for social and business networking; 33,000 sq ft retail and F&B space; as well as the 219-unit Midtown Bay, with Soho-style apartments. The development also boasts over 30 themed gardens and landscaped areas totalling 3.8ha. Midtown Modern is developed by GuocoLand in a joint venture with Hong Leong Holdings and Hong Realty.

The development of Guoco Midtown has also spurred renewal in the neighbourhood. Shaw Tower, a former mixed-use commercial building with office and cinemas, built in 1975, has been torn down in 2020. Construction is underway for a new 450,000 sq ft, Grade-A office tower with five storeys (15,700 sq ft) of retail and F&B.

Read more at: https://www.edgeprop.sg/property-new...-price-premium