The Real Deals (29-09-2011)
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SEE APPENDIX I FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS Co. Reg No: 198700034E MICA (P) : 090/11/2009 THE REAL DEALS Ins & Outs of Singapore Real Estate Win‐win projects Property prices are getting a little peakish. Investors who bought new units in early 2008 must now make a decision. Their projects have either just received the Temporary Occupation Permit (TOP) or are expected to soon. Before long, the remaining 40% of their bank loan will be drawn down and loan servicing will begin in earnest. With price upside likely to be capped in the near term, investors who are already in the money might be more inclined to offload their units to take profit instead of keeping them for rental income. If these units are put out for sale at the same time, the surge in supply may provide an opportunity for a good bargain, a win‐win for both parties – buyer gets a unit with good rental yield and seller gets to take profit at a reasonable level. In this issue, we handpick three projects with good potential rental yield. Clover by the Park by Sim Lian Group has just obtained its TOP, while Woodsville 28 and Waterfront Waves, both by Frasers Centrepoint, are expected to receive their TOP soon. Using the median rental of nearby completed projects as a gauge, the said projects can expect a gross rental yield of above 4%. Waterfront Waves, which is jointly developed by Frasers Centrepoint and Far East Organization, ranks top with 4.45%. Woodsville 28 appears to be rather attractive as well. Apart from an estimated gross rental yield of 4.17%, it is located right next to the Potong Pasir MRT Station – two stops away from Serangoon, where an interchange station for two major train lines and the biggest suburban retail mall are, and just four stations away from Dhoby Ghaut, along Singapore’s renowned Orchard Road shopping belt. Featured projects with good potential rental yields Clover by the Park Woodsville 28 Waterfront Waves Location Bishan Potong Pasir Bedok Tenure 99‐yr 99‐yr 99‐yr Developer Sim Lian Frasers Centrepoint Frasers Centrepoint and Far East GFA (sq ft) 825,646 116,649 550,000 Expected TOP July 2011 3Q11 4Q11 Total number of units 616 110 405 No. of units sold 609 110 405 Average selling price in secondary market in August 2011 $1,110 psf $1,140 psf $990 psf Nearby completed projects Bishan Park Condo, The Gardens at Bishan Woodsville Mansion, Leicester Lodge, One Leicester, Parc Aston, Intero, Platinum Edge Baywater, The Clearwater, Aquarius by the Park Median rental for nearby completed projects in August 2011 $3.23 psf pm $3.44 psf pm $3.19 psf pm Estimated rental (15% premium) $3.71 psf pm $3.96 psf pm $3.67 psf pm Yield 4.01% 4.17% 4.45% Source: URA, Kim Eng
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