You have heard of new launch developments, mixed developments, old developments but have you heard of integrated developments?
Integrated developments can be found all over Singapore and there are plans to develop more in the near future, seeing the increasing interests of property buyers. But why are they different from those normal condominiums?
Integrated developments are those which consist of not only commercial shops, it has a retail size of more than 100,000sqft. They come with amenities such as MRT stations, retail, dining, entertainment etc on top of the usual condominuim’s facilities. They are basically the one stop solution for all your lifestyle needs.
One such example of integrated development is North Park Residences where North Point shopping mall sits comfortably below the stack of residential blocks.
According to an article from The Business Times, property buyers in Singapore view convenience as one of the main key decision in property purchasing. They prefer to live in a place where they can shop, eat and have direct access to the MRT station all at the same time. Although these integrated developments are leasehold, that is 99 years land lease, property buyers are still willing to pay the premium price all because of the additional value it has over the other residential developments and accessibility.
OK, so property buyers love convenience and are willing to pay the extra for it. But surely that isn’t the only reason why they don’t mind to pay the extra bucks right?
You’re definitely right!
Resale transactions for Integrated Developments
Let’s look at one of the high-end luxury integrated developments, Orchard Residences in District 9, stands right above Orchard MRT Station for instance. The heart of Orchard Road where all your shopping craves from the luxurious brands are satisfied, it is situated right above ION Orchard. Even though The Orchard Residences is surrounded by many freehold developments, the average transacted price for the past 5 years is $3153 psf compared to that of its surrounding neighbours of $2528 psf! The charts shown below are taken from 99.co.
Based on recent transactions in 2019,
|Address||Area (Sqft)||$PSF||Current Price||Launched Price|
|The Orchard Residences (2007)||2,465||3,367||8.3M||8.058M|
|Four Seasons Park (2005)||2,874||2,818||8.1M||4.05M|
|The Boulevard Residence (2006)||2,034||2,350||4.78M||4.189M|
First thing that catches your eye probably is that significant profit made in Four Season Park, am I right? But did you know that Four Seasons Park, though a freehold development, was constructed in 1994? The building is about 26 years old, and buildings after 10 years will start to have wear and tear issues and also higher chances of having leakages. Although it seemed this the first owner is profitting almost $4m, this unit has already been sold for 3 times. Overall, do you see that the psf is must higher in Orchard Residences as compared to the other two?
What about the rental transactions of this integrated developement?
The Orchard Residences. Similar to the resale transactions, we look at the past 5 years average rental psf. The Orchard Residences stands at an average of $5.99 psf while the average rental psf of its surrounding neighbours are at $3.86 psf.
The following chart shows the rental transactions in Feb 2020
|The Orchard Residences||1800-1900||5.95||11,000|
|Four Seasons Park||2200-2300||3.69||8,300|
|The Boulevard Residence||2000-2100||3.90||8,000|
Notice that The Orchard Residences despite being smaller in unit size, is fetching a much higher rental yield as compared to the other two. Even tenants are more drawn to convenience and are willing to pay a premium price for it. According to one article that I chanced upon, Thai tycoon Mr Charoen Sirivadhanabhakdi, bought 16 apartments at The Orchard Residences for $135 million, around $3600 psf back in 2007 when it was launched.
Moving on to another district, let us compare Watertown and A Treasure Trove at Punggol, both at District 19. Both of them are leasehold developments, and their TOP dates are only 2 years apart.
|Address||Launch Date||Av. PSF (Resale)||Current Resale Price (2020) $PSF||Av. PSF (Rent)||Current Rent Price (2020) $PSF|
|Watertown (TOP 2017)||2012||$1339.16||1,471||$3.4||3.82|
|A Treasure Trove (TOP 2015)||2011||$1,116.75||1,197||$2.61||2.87|
Looking at the map below, do you see that Watertown and A Treasure Trove is only 450m apart from each other? Why then do you think the difference in the prices?
Watertown is an integrated development in the heart of Punggol Central, situated above Waterway Point and easily accessed to the North East Line, Punggol MRT Station and LRT. With a total of 992 residential units and a retail size of 370,000 sqft, Watertown is beautifully designed with al fresco dining, Shaw Theatres IMAX cinema and a wide range of retail shops for your daily needs.
To sum it all, the main reason why property buyers prefer to buy integrated developments is because they are buying into the value that the property can offer. Based on the statistics above, we can see that these integrated developments have a higher resale value overall. Tenants also do not mind paying a little extra for convenience. However, do note that not all integrated developments are the right ones for you. It will be good to talk to a trusted agent who can advised you based your needs and financial situation to ensure you can maximize your profits.
If you would like to find out more details regarding all the integrated developments Singapore has to offer, you can read them here!
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