Unit at Scotts Square hits $4,453 psf

Scotts Square

A 624 sq ft, one-bedroom apartment on the 42nd floor of Scotts Square changed hands at $2.78 million, or $4,453 psf

THE EDGE SINGAPORE

| AUGUST 26, 2013|

BY AmY TAN|

On Aug 5, a 624 sq ft, one-bedroom apartment on the 42nd floor of Scotts Square on prime Scotts Road, just off the famous Orchard Road shopping strip, was sold for $2.78 million, or $4,453 psf. The buyer is believed to be a foreigner who purchased the unit for his own use in a deal brokered by Savills. “More than half the foreign buyers of Scotts Square are owner-occupiers,” says Samuel Eyo, director of Prestige Homes Savills. He adds that most of the foreign buyers of Scotts Square are Indonesians, who like the location for its proximity to Orchard Road.

Scotts Square is a 338-unit freehold high-end condominium project developed by listed luxury developer Wheelock Properties and completed in 2011. The project comprises two residential towers — one of 35 storeys and the other 43 storeys — sitting on top of a four-storey shopping mall. Units are a mix of one- to three-bed-room apartments.

Based on caveats lodged, this is the third transaction this year. The last two deals were for two adjacent units of 624 sq ft each and situated on the 15th floor. Both one-bedroom apartments were sold at $2.3 million ($3,684 psf) apiece in January and July, respectively. The purchase price for both units back in mid-2007 was also identical—$2.43 million, or $3,888 psf.

Prices of units at Scotts Square sold in 2007 ranged from $3,618 to $4,451 psf. Prices hit an all-time-high of $4,803 psf when a 635 sq ft, one-bedroom unit on the 43rd level was sold for $3.05 million around the time the project obtained its Temporary Occupation Permit (TOP) in August 2011. In January this year, Scotts Square obtained its Certificate of Statutory Completion and Subsidiary Strata Certificate of Title.

As at end-June, 79% of the units, or 267 apartments, at Scotts Square were sold, at an average price of $4,004 psf, according to Wheelock Properties in its 2Q2013 report released on Aug 6.

In the resale market, some owners of luxury condo units are starting to get jittery, according to property agents. This is especially so following the introduction of the Total Debt Servicing Ratio (TDSR) framework on June 28.

In fact, luxury prices have already started to soften, according to Jones Lang LaSalle’s Asia Pacific Luxury Residential Index. Luxury residential prices in Singapore saw a 0.6% q-o-q drop in 2Q2013 and an annual decline of 2.1% as government measures continue to affect investor sentiment, says JLL.

At Scotts Square, for instance, listings in propertyguru.com.sg show that asking prices are still hovering around $4,000 psf, ranging from $3,937 psf for a one-bedroom unit to $4,163 psf for a three bedroom unit.

Meanwhile, asking rents for 624 sq ft, one-bedroom apartments at Scotts Square are from $5,500 to $5,800 a month for partially furnished units. Based on the latest transaction price, gross rental yield works out to between 2.37% and 2.5%. As for the slightly larger 635 sq ft, one-bedroom apartments, the asking rent is about $6,000 a month currently, according to listings on propertyguru.com.sg. Two-bedroom apartments have asking rents ranging from $6,800 to $7,400 a month.

Nearby, located at the junction of Scotts Road and Cairnhill Road is Far East Organization’s 231- unit The Scotts Tower, designed by Dutch architect Ben van Berkel of UNStudio. The 103-year leasehold condo was launched towards the end of 2011. Of the 169 units launched to date, 132 were sold as at end-July. Four units were sold last month at prices ranging from $3,344 to $3,538 psf.
The Scotts Tower

The most recent transaction was for a 624 sq ft unit that was sold for $2.19 million ($3,506 psf). The highest psf price was achieved in February this year, when an 872 sq ft, two-bedroom unit on the 22nd floor was sold for $3.72 million, or $4,267 psf.

The Scotts Tower comprises a mix of one- to three-bedroom SOHO-style apartments and fourbedroom penthouses, with sizes ranging from 624 to 3,315 sq ft. Like Scotts Square, more than half of the buyers of The Scotts Tower are foreigners, says Savills’ Eyo.

While the enforcement of the TDSR framework has resulted  in a slowdown in property transactions and deterred some local buyers, especially investors holding on to multiple units, the prime Orchard Road area continues to see buying interest from foreign buyers, especially those from Indonesia and mainland China, adds Eyo.