Allgreen Properties’ first of three new projects in prime District 10 is drawing buyer interest. Will the developer’s $1.2 billion bet on The Bukit Timah Collection pay off?
This year, an estimated 60 residential projects are slated for launch. Kicking off the year is Allgreen Properties’ highend condominium Fourth Avenue Residences. The 476-unit project held its preview over the weekend of Jan 5 and 6, drawing more than 2,000 visitors.
“We are encouraged by the turnout at the preview,” says Anson Lim, Allgreen Properties’ senior general manager — residential marketing and sales. “As the first major project of the year, we also hope that we can inject positive sentiment into the property market.”
Lim reckons that about 70% of the prospective buyers are residents in the Bukit Timah area, while 30% are from the surrounding city-fringe areas, for instance the Upper Bukit Timah and Toh Tuck area in District 21, the Alexandra-Commonwealth area in District 3 and the Buona Vista-Clementi area in District 5. “Some are looking to buy for their own use — and there is a good mix of investors and owner-occupiers — while others are looking to buy for their children or grandchildren,” he observes. Fourth Avenue Residences is located adjacent to Sixth Avenue MRT station on the Downtown Line and in the vicinity of a Good Class Bungalow area. It is also near top schools such as Hwa Chong Institution, Nanyang Primary School and Methodist Girls’ School.
The upcoming private condo is situated on a 99-year leasehold site that was purchased by Allgreen Properties in a government land sale (GLS) tender in December 2017 for $533 million, or $1,540 psf per plot ratio (psf ppr).
According to Lee Sze Teck, head of research for Huttons Asia, the last GLS site that was sold in the Bukit Timah area in prime District 10 was more than 20 years ago. The site on Duchess Avenue was purchased in 1995 by Wing Tai Holdings and developed into the 251-unit Duchess Crest. Meanwhile, the last new launch of a private condo in the area — the 175-unit The Sixth Avenue Residences — was 12 years ago. “Pent-up demand has therefore been building up for more than 10 years,” says Lee.
“Furthermore, not many projects in the prime districts can claim to have an MRT station at their doorstep,” adds Lee. On Bukit Timah Road, Fourth Avenue Residences is the only residential development with a direct covered linkway to the MRT station. Recognising the pent-up demand, Allgreen, a property group controlled by Malaysia’s richest man Robert Kuok, purchased not just one but three residential sites in the prestigious residential enclave in December 2017. Besides the Fourth Avenue Residences site, Allgreen Properties bought Royalville and Crystal Tower. Both of these are freehold, collective sale sites. Royalville, which is located near Fourth Avenue Residences, was purchased for $477.94 million ($1,960 psf ppr) while Crystal Tower was acquired for $180.65 million ($1,840 psf ppr).
The purchase of the three sites for a total of about $1.2 billion was “strategic”, says Allgreen’s Lim. The three new projects have since been collectively branded The Bukit Timah Collection. Fourth Avenue Residences is the biggest development within the collection, both in terms of land area and number of units. Crystal Tower will be launched as the 115-unit Juniper Hill, while Royalville will be redeveloped into a luxury project with just 285 units. The entire luxury property portfolio under the Bukit Timah Collection contains just 876 units, says Lim.
Allgreen is known as a developer of quality projects. The group even has its own in-house design team that works closely with the appointed architects. At Fourth Avenue Residences, the appointed design architect is RSP Architects & Planners.
About 67% of the units are one- and two-bedroom apartments, including two-bedroom premium units. The one- and two-bedroom units range from 474 to 721 sq ft. The one-bedroom units start from $1.05 million, while the two-bedroom units start from $1.4 million. The three-bedroom units start from 915 sq ft, with prices from $2.08 million, while four-bedroom-plus-study units start from 1,475 sq ft, with prices from $3.387 million. The selling price is said to start from $2,180 psf.
“Fourth Avenue Residences presents a good opportunity for people who currently don’t own a property in the prime districts,” says Allgreen’s Lim.
The one- and three-bedroom units at Fourth Avenue Residences were the most popular, as many of the potential buyers are residents from the Sixth Avenue neighbourhood while others are parents buying for their children to live near them, according to DBS Group Research analysts Rachel Tan and Derek Tan in their Jan 8 report on the Singapore property market.
The DBS analysts estimate the break-even price for Fourth Avenue Residences to be about $2,000 psf. With indicative selling prices from $2,180 psf, Allgreen “might look to achieve a good sales start before pricing higher in the medium term”, they reckon.
Developments with good design concepts and located just a stone’s throw from an MRT station could see an annualised price growth of 4.4% from the time of launch, says Tan Tee Khoon, Knight Frank executive director and head of residential project marketing. Tan expects Fourth Avenue Residences to see similar price appreciation in the years ahead.
In January, only three projects were previewed. Besides Fourth Avenue Residences, the other two are projects by listed property developer Roxy-Pacific Holdings: the 140-unit RV Altitude on River Valley Road and the 71-unit Fyve Derbyshire in the Novena area.
The next launch is likely to be after the Chinese New Year, which falls on Feb 5. It is said to be Logan Property’s 1,400-unit Florence Residences on the site of the former Florence Regency privatised HUDC estate on Hougang Avenue 2, says Huttons’ Lee.
Other projects that will be launched after the Chinese New Year include Sustained Land’s One Meyer on Meyer Road, TEE Land’s 35 Gilstead and Aurum Land’s Nyon on Amber Road. With 19,000 units that may be slated for launch this year, “buyers will have plenty of options”, says Lee.
“However, we are of the view that developers are likely to pace their launches according to demand.” He expects sales of new launches this year to ring in at between 9,500 and 11,000 units and prices to increase up to 5% by end-2019.
Eugene Lim, ERA Realty’s key executive officer, concurs. “The new projects will provide support for property prices,” he says. “We expect prices to increase marginally by 2% in 2019, with developers’ sales in the range of 8,000 to 10,000 units.”
It looks like Allgreen will have first-mover advantage by being the first developer with a major project launch out of the gate on the first weekend of the New Year.