Market News

14 Feb 2020

The M braves virus outbreak with preview

WING Tai Asia on Thursday announced the opening of its latest development in Bugis, The M condominium, for a public preview this Saturday. It also unveiled its indicative pricing, ranging from S$2,200 to S$2,400 per sq ft (psf), which it described as "not very aggressive". The property developer has held off on announcing the date of its actual sales launch and the number of units it will release for sale, because it wants to gauge buyers' response to the preview - given the novel coronavirus (Covid-19) situation - before deciding. Christine Li, Cushman & Wakefield's head of research for Singapore and South-east Asia, said The M probably has the lowest psf land price relative to the projects in the pipeline in the area. "This could mean that developers for other sites, such as those in Tan Quee Lan Street, Bernam Street and the former Chinatown Plaza, are likely to launch their projects at the same price point, or higher, given the higher land cost. "But based on the indicative pricing, The M is considered quite reasonably-priced, given the positive attributes of this project." The 522-unit residential-commercial property sits in the Ophir-Rochor Corridor, which the government plans to transform into a vibrant, mixed-use district and "car-lite" precinct, with cycling paths and more pedestrian walkways. The development's location in Middle Road puts it near the arts and cultural precinct, and within walking distance of the Bugis, City Hall and Esplanade MRT stations. The M embraces the "Home/Work concept", which enables residents to transform their apartments into office spaces. The developer expects the project to attract both investors and home buyers; millennials who want to live near the city and young families are expected to make up a significant portion of the buyers. The M's apartments are spread across three 20-storey towers and a six-storey block. In addition to studio and one- and two-bedroom units, the development will offer three bedroom dual-key apartments of between 409 square feet and 904 square feet. Studios, one-bedroom and two-bedroom units will make up 96 per cent of the units. Stacey Ow Yeong, head of marketing at Wing Tai Property Management, said indicative prices start at just below S$1 million for the studios, from S$1 million for the one-bedroom units, from S$1.1 million for the one + study units, from S$1.3 million for the two-bedroom ones, from S$1.6 million for the two + study units, and from S$2 million for the three-bedroom dual-key units. The M will be the result of a maiden collaboration between Wing Tai Asia and arts college Lasalle. Both sides have inked a three-year partnership to integrate urban living art, done by Lasalle alumni, into The M from an early stage. Under this collaboration, paintings, sculptures and interactive displays will be installed in the development. Ms Ow Yeong, asked whether she was concerned that the ongoing viral outbreak would keep people away from the showflat, replied candidly: "If I say I'm not worried, I won't be telling the truth." But she added that genuine buyers would still drop in, although fewer people may visit the showflat, just as there has been lower footfall in restaurants and malls. The property agents who have been pre-marketing the project are confident of a good turnout. Wing Tai Asia has, nonetheless, introduced health and safety measures such as temperature screening and collection of visitors' contact details. The sales gallery will also be professionally cleaned every hour. Separate holding areas will be set up for agents and visitors, and a schedule has been drawn up to stagger visitor arrival times; a limit will also be imposed on the number of people in the gallery at any one time to avoid overcrowding. The M is expected to be completed in the first quarter of 2024. Ms Ow Yeong, asked whether foreigners are expected to make up a big percentage among buyers, replied "not really", because of the product type and price point. "Foreigners typically buy core central properties in the Orchard/ Nassim area, the S$3,000-to-S$4,000 psf, S$5 million-to-S$8 million quantum kind." The kind of foreigners it expects to attract are those with children enrolled in the schools nearby, or those already living and working here. She added that Wing Tai Asia had previously engaged agencies in China and Hong Kong to promote the project there, but these promotions have been put on hold amid the Covid-19 outbreak. Consultants said the location of The M is its key selling point, and praise its connectivity, amenities and the area's food and beverage options. Ms Li noted that for comparison, Midtown Bay in Beach Road has sold 46 units at a median price of S$2,926 psf since its launch in Q4 2019; Marina One Residences sold 78 units at S$2,540 psf from Q1 2019 to Feb 2020, while One Pearl Bank in the Outram-Chinatown district has sold 255 units at S$2,371 psf since its launch in Q3 2019. Knight Frank head of research Lee Nai Jia pointed out that Bugis is evolving, with the additions of South Beach, Duo and Guoco Midtown. "The M is a bit different from South Beach Residences, which is a high-end luxury product, with more units with larger rooms. The M has more two-bedroom or smaller units, and the quantum and average unit price is lower than that of South Beach Residences. The buyers are likely to be young professionals working in the area," he said. The M is the third development to open for viewing since news of the virus broke. Executive condominium Parc Canberra still pulled in the crowds when it opened its sales gallery in late January. Balloting will be done on Friday morning, and successful applicants will be invited to book their units on Saturday. Verticus in Balestier is holding its VIP preview this weekend, but no start date for sales has been announced. Source from The Business Times 14 Feb 2020

05 Feb 2020

Developers likely to proceed with launches amid virus outbreak

RESIDENTIAL projects slated for launch in the next couple of weeks appear likely to go ahead as planned for now. However, visitorship to showflats and transaction volumes could decrease amid concerns about the coronavirus outbreak, analysts say. Alan Cheong, Savills' executive director (research & consultancy), expects developers to continue to launch as planned. "Otherwise, you will have bunching up. Already without the virus, sales have been slow," he points out. However, he reckons that developers could scale down the size of the launch by reducing the number of units released for sale. Where prospective buyers are concerned, sentiment is likely to be affected, with dampened enthusiasm to visit showflats as developers put in place precautionary measures such as temperature checks, he adds. In the first quarter of this year - assuming the outbreak is not a protracted one - Mr Cheong expects sales volumes for units in both the primary and resale markets to fall. Developers will put marketing trips to China and possibly Hong Kong on hold for now, which will affect the number of overseas nationals buying properties at new projects here, he says. However, he believes the resale market may do better than the primary market in relative terms, if sellers under pressure cede to buyers' asking prices. Lee Nai Jia, head of research at Knight Frank, also expects developers to proceed with property launches, pointing out that there is the possible risk of the virus spreading further and sentiment deteriorating if they wait. "In view of what is going on, visitorship to showflats will come down, unless the project is very attractive in terms of attributes such as location," he says. Given the travel curbs that Singapore has put in place, sales from Chinese buyers will be slower over the next two weeks to a month, he adds. Dr Lee reckons that the number of units sold in the primary market in the first quarter will decrease, but that the resale market might be more impacted should worried private home-owners decide to cut back viewings and hit pause on the sales process until things stabilise. Christine Li, Cushman & Wakefield's head of research (Singapore and South-east Asia), says there could be a slight impact on project launches as developers are likely to hold back new launches. However, she notes that it is "still early days" with launches normally only hitting full swing post-Chinese New Year in March. She adds: "Although there is still caution in the market, developers are unlikely to make any drastic change in terms of pipeline launches." In particular, high-end luxury properties which might typically see more Chinese buyers could face slower take-up rates as viewings ease amid the outbreak, Ms Li highlights, adding that the impact is still likely to be contained since Singapore is perceived as a safe haven amid global headwinds. Executive condominium (EC) Parc Canberra, which launched its sales gallery last Friday, still managed to bring in the crowds. The project by Hoi Hup Realty and Sunway Developments saw 5,800 visitors over the weekend, according to general manager of Hoi Hup Realty, Koon Wai Leong. The two developers also put in place precautions at the showflat, such as mandatory temperature checks, hand sanitising, recording of contact information of all visitors as well as checking their travel history. Those who had travelled to mainland China in the last two weeks were requested not to visit the showflat. In addition, the developers ramped up the frequency of cleaning at the premises. Another EC, OLA, is poised to open its show gallery to the public on Feb 15, subject to the necessary approvals. The 548-unit EC is being developed by Anchorvale, a joint venture between Evia Real Estate and Gamuda Land. Vincent Ong, managing partner of Evia Real Estate, says the developers have assessed the situation and deemed it safe enough to continue with the launch of the show gallery. Pointing out that ECs are not available to foreigners, he adds: "Given the more localised pool, there is a smaller chance of contracting the virus." Still, there will be precautions in place, such as sanitisers, temperature screening and checking of travel history. Visitors who clear the checks will be identified by stickers and will go through the sales gallery via a designated route, so as not to mix with those who have not been cleared. Anchorvale says it is prepared to roll out online booking and videos to enable buyers to select units in the event the situation worsens. And Bukit Sembawang Estates plans to release the final phase of its 999-year landed development, Luxus Hills, later this month. A spokesperson says: "We have plans to proceed with the launch in end-February and will put in place a range of precautionary measures to safeguard the well-being of our staff, agents and visitors." Soilbuild is also proceeding with a preview of its development Verticus on Feb 8. A spokeswoman says: "As the situation remains fluid, we are actively monitoring and will respond accordingly." Like the other developers, it will also take the necessary precautionary measures at the showflat. Where pricing is concerned, Cushman & Wakefield's Ms Li says developers are unlikely to cut prices, given that some are already working with thinner margins and also still have some breathing room before ABSD deadlines hit. She adds: "In fact, some of the existing launches could even realign their pricing with competitors' in the vicinity." Source from The Business Times 5 Feb 2020