Jan 18, 2007

Orchard Rd still beats Marina Bay, says Simon Cheong

Home rentals along prime shopping belt likely to rise by 20%-25% this year

By Fiona Chan

MARINA Bay homes may be hogging the headlines with their sky-high prices, but Orchard Road is still Singapore's foremost luxury residential district, says property entrepreneur Simon Cheong.

The chairman and chief executive (CEO) of boutique developer SC Global expects demand for Orchard Road homes to rise this year, pushing up prices and rentals along the prime shopping stretch.

Rents there are likely to surge by 20 to 25 per cent, and prices will jump even more, Mr Cheong said in an interview yesterday.

These predictions have been revised upwards from his estimates last August, when he was quoted as saying that Orchard Road rents could go up by 15 to 20 per cent.

A big reason for his more bullish projections now would be the recent record prices at Marina Bay. One unit at 99-year leasehold Marina Bay Residences reached an all-time high of $3,500 per sq ft (psf), eclipsing prices of freehold Orchard Road homes.

'If Marina Bay prices are so high, can you imagine what Orchard Road prices will be? Definitely stronger,' said Mr Cheong.

Apart from The Lincoln Modern in Newton, most of SC Global's high-profile projects are in the Orchard Road area.

They include The Ladyhill near Nassim Road and The Boulevard Residence (BLVD) at Cuscaden Walk.

Although high-end home prices already climbed 35 per cent last year, Mr Cheong believes that 'the market has just begun'.

He expects a shortage of luxury homes in Orchard Road once the collective sale estates are torn down. At the same time, demand for such homes will increase with the ongoing remaking of the area.

'There are very few Orchard Roads in the world,' said Mr Cheong. 'It is unique because it's one continuous street of lifestyle, entertainment and shopping.'

He is backing his predictions with two upcoming projects in the area. The first, The Marq on Paterson Hill, will be launched in the second quarter of this year and is being billed as the developer's 'most exclusive condominium' to date. The other is to be built on the former Hilltops Apartments.

The Marq, on the former Paterson Tower site, has two 24-storey towers and 60 to 70 units.

One tower will feature apartments, each with a private lap pool, that take up entire floors.

These units will each be 4,500 sq ft, catering to the current demand for large apartments, said Mr Cheong. The smallest unit in the project is a largish 2,800 sq ft, while the biggest will be a 11,000 sq ft 'super penthouse'.

Although prices for units at The Marq has not yet been finalised, Mr Cheong said the project will be more expensive than The Ladyhill and BLVD. The latter developments were launched at $1,500 psf but have since seen units sold at more than $2,000 psf.

Mr Cheong expects The Marq to fetch monthly rentals of $6.50 psf to $7 psf, which translates into a conservative price of at least $2,800 psf, said consultants.

Mr Ku Swee Yong, director of marketing and business development at Savills Singapore, thinks prices are likely to be between $2,800 psf and $3,200 psf.

He noted that prices at 99-year leasehold Orchard Turn, another upcoming project in the area, are being estimated at $2,500 psf.

'Since The Marq is freehold, it should be pricier,' he said.

Already, The Marq has received enough interest from potential buyers to account for almost the whole condominium, Mr Cheong said.

But he is in no hurry to find buyers, of whom he expects 50 to 60 per cent to be foreigners.

Also, he is not worried about speculators in Marina Bay shifting their attention to Orchard Road.

'In Orchard Road, particularly for freehold developments like The Marq, I think it's not a speculator's market,' he said.

'It's for the ultra-rich who fly in for half a day and decide to buy; they're not here to queue. It's not that kind of market.'

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