Hot property: Mixed-use developments

Straits Times: Fri, Jan 20

AN ENTHUSIASTIC response by home buyers to the newly launched Watertown in Punggol Central has provided yet more evidence of a sure-fire winning formula for developers. Even in subdued market conditions, buyers seem to flock to large mixed-use developments which include state-of- the-art shopping options. If the residential and mall development is linked to an MRT station, as with Watertown, chances are that house hunters and investors will show up in droves. At Watertown, buyers bucked the trend of recent slow sales elsewhere by snapping up more than 230 units in the first two days of preview at the 992-unit project - 55 per cent of which were small units under 700 sq ft. Prices were also raised by between 3 per cent and 5 per cent from the average of about $1,080 psf when the project first previewed on Wednesday. And the rapid buying came despite the showflat being ready only yesterday evening. This prompted its developer to move its official launch, originally planned for next week, to today. The $1.6 billion project is being jointly developed by Far East Organization, Frasers Centrepoint and Japanese firm Sekisui House. It will be integrated with a mall of 370,000 sq ft of net lettable shop space and a Shaw Theatres Imax cinema. It is one of the largest projects to be launched in recent years. Only a handful of others, such as the 1,715-unit d'Leedon in Leedon Heights and 1,145-unit The Minton in Hougang, have had more units. The same winning formula worked a treat at CapitaLand's 583-unit Bedok Residences, launched in November. The project attracted brisk sales, despite setting a benchmark price of $1,350 psf. A hefty 350 units were moved within the first day of launch. Bedok Residences, in Bedok Town Centre, is part of an integrated development of homes, a shopping mall and a transport hub linked to Bedok MRT station. The Ion Orchard mall and The Orchard Residences, built on top of Orchard MRT station, have also seen a good response. The project's apartments, launched in 2007, are more than 90 per cent sold and have fetched prices of up to $4,799 psf. GuocoLand also paid $1.7 billion for a site in Tanjong Pagar in February last year that it plans to turn into a major commercial, hotel and residential development. These will all be linked to the MRT station via a basement with the project expected to be completed by 2016. Experts say mixed-developments seamlessly linked to MRT stations have taken off in recent years and are popular, as they are regarded as highly rentable. Chesterton Suntec International research head Colin Tan said more of these developments can be expected as the MRT rail network expands, allowing the Government to push out more such sites. 'Developers realise they have hit on a working formula, as each segment can leverage on the others... There's more demand than supply for such mixed-use projects now, allowing developers to push up psf prices,' he said. International Property Advisor chief executive Ku Swee Yong said such integrated projects could be geared more towards investors who are looking to lease out the homes at higher rents. 'Some people might shun these projects as there is the clutter and complexity of the retail mall below. But investors might be keen to lease out the units at higher rentals to tenants or expats who do not own cars,' he noted. Far East chief executive Philip Ng had noted at the unveiling of Watertown earlier this week that large mixed-use developments are becoming more common as the Government has been putting more of these sites on sale. 'As you can see from the land tenders, developers do recognise a lot of value and recognise that home buyers want to be in mixed-use developments integrated with the community and high connectivity. 'The last few years in Singapore have seen tremendous success in mixed-use developments like Bedok Residences, and also smaller ones like Greenwich Village, Hillier... and Frasers' Compass Point.' Mr Ng said such developments do very well, too, in cities like Hong Kong, Tokyo, London, New York and Paris. [e-mail] WATERTOWN IN PUNGGOL CENTRAL A development that will be integrated with a mall 992 units at an average of $1,080 psf 160 units sold in first five hours of preview this week THE ORCHARD RESIDENCES It is linked to the Orchard MRT station and Ion Orchard mall 90 per cent sold since 2007 launch, at prices of up to $4,799 psf BEDOK RESIDENCES An integrated development with homes, a mall and a transportation hub linked to Bedok MRT station 583 units; set a benchmark price of $1,350 psf 350 units sold in first day of launch Source: The Straits Times