Savvy property investors have been rushing to get a unit at The Regency at Tiong Bahru after the condominium received its temporary occupation permit (TOP) in April, pushing the price to a new high of $1,493 psf. The fully sold 158-unit freehold development, which is UOL Group’s third project in the Tiong Bahru area, was officially launched in 2006 at an average price of more than $800 psf.

Demand for the units at The Regency has been overwhelming, mainly because there are only three freehold developments in the area, all of which are developed by UOL and have revitalised the old neighbourhood, say property agents.

UOL’s two earlier freehold condo developments, Twin Regency and Regency Suites, also saw all units sold out within months of their respective launches, given their convenient location on the city fringes.

“Now that buyers can see the actual finished product at The Regency at Tiong Bahru instead of just the site plan when it was under construction, there is renewed interest in getting a unit there,” says Matthew Koo, marketing director of ERA and a specialist in the sale of the project.

Since The Regency obtained its TOP more than three months ago, Koo and his team at ERA have sold 17 of the more than 50 units that they are marketing on behalf of owners in the secondary market. The latest asking prices for a unit at The Regency range from $1,250 psf for a three-bedroom unit to $1,450 psf for a two-bedroom apartment. Meanwhile, four-bedroom units are commanding average prices of $1,150 psf.

From July 6 to 19, four units at the development changed hands at $1,288 to $1,493 psf. A three-bedroom unit on the 21st floor of Block 38 was sold for $1.65 million ($1,288 psf) on July 12, representing a 19% gain for the seller, who bought it for $1.4 million ($1,084 psf) last November. This is the second time that the unit has changed hands in the secondary market. The seller had purchased it in a subsale from the first buyer who had bought it for $1.09 million ($851 psf) from the developer when it was launched in 2006.

The two others units that were sold are neighbouring units on the 34th floor of Block 36. One was a two-bedroom unit, which sold for $1.38 million ($1,493 psf). This represents a gain of about 40% to the seller, who had purchased the unit in December 2006 for $986,000 ($1,065 psf). The other unit was a three-bedroom apartment that changed hands for $1.65 million ($1,300 psf). The seller bought it for $1.3 million ($1,023 psf) from the developer in December 2006.

And, on the 35th of the same block, a two-bedroom unit went for $1.4 million ($1,488 psf).

Two-bedroom units most popular

Koo says the most popular units among buyers at The Regency are the two-bedroom apartments. Just last week, two couples in their early thirties bought the units for investment, with the intention of renting them out. Rental yield for units at the development is estimated to be close to 4% a year, he says.

Even though the condo is located in District 3 on the city fringes, it is able to command the kind of rental returns seen in the prime districts of 9 and 10, observes Koo. He estimates that more than 75% of the two-bedroom units at The Regency are being rented out, with the latest asking rents at around $4,500 a month. Three-bedroom apartments there can command rentals of $5,500 a month, while four-bedroom units fetch as much as $6,300.

Located at Chay Yan Street, The Regency is a 10-minute walk from the Tiong Bahru MRT station. The development also overlooks two old conserved four-storey blocks that are not likely to be redeveloped. This means owners of units on the high floors get unobstructed city views.

Another project that is getting the attention of savvy buyers is Rivergate, a 545-unit freehold development along the Singapore River that was completed early last year. There were three deals at prices ranging from $2,101 to $2,151 psf from July 6 to 13.

These latest transactions have crossed the $2,000 mark, which is close to the peak level achieved in 2H2007. The highest price achieved at Rivergate in terms of psf-price was $2,701 in May 2007, when a 3,143 sq ft unit on the 40th floor was sold for $8.5 million. A two-bedroom unit on the 24th floor of Block 99 was recently sold for $2.2 million ($2,150 psf), which is a whopping 76% capital gain for the seller, who had purchased the unit from the developer in March 2006 for $1.3 million ($1,219 psf).

In the same block, a two-bedroom unit on the 34th floor went for $2.1 million ($2,101 psf). The seller bought it from the developer for $1.3 million ($1,289 psf) in March 2006, hence seeing a price appreciation of 62%. The third unit that changed hands from July 6 to 13 was a two-bedroom unit on the 29th floor of the same block. It was sold for $2.2 million ($2,151 psf). This represents an 83% gain for the seller, who purchased it for $1.2 million ($1,174 psf) from the developer in October 2005.

Situated along Robertson Quay and Martin Road, the Rivergate development is the first residential project in Singapore to be accorded landmark status by URA. It is jointly developed by CapitaLand and Hwa Hong Corp.

According to Keith Tan, associate team director at PropNex, Rivergate is popular with investors as the units are large and therefore sought-after by expatriates. In fact, most owners are investors, he notes, adding that 80% of the units in the three 43-storey towers are currently tenanted.

Good rental return

Higher rental return is one of the factors that draw investors to Rivergate, notes Tan. He reckons that rentals at Rivergate have appreciated by some 50% compared with a year ago. When TOP was obtained in March last year, average rental for a two-bedroom unit at Rivergate ranged from $3,500 to $5,000 a month. Today, such units are fetching up to $6,000.

Meanwhile, owners of three-bedroom units who previously rented them out at between $5,000 and $6,500 a month are now able to get $8,000.

When the project was first launched in 2005, units were priced at $1,080 psf on average. Prices of units in the final phase, released a year later, were $1,600 psf. Today, the average asking price for a low-floor unit at Rivergate is about $1,900 psf, while higher- floor units from the 25th floor could fetch around $2,000 psf, says Tan.

Source : The Edge – 2 Aug 2010