Rising land value has encouraged landlords to develop more mixed-use projects.
This includes developing more residential units along Shenton Way, once known as Singapore’s Wall Street.
And as more financial services firms gravitate towards the new downtown area, industry players said Shenton Way has a unique opportunity to regenerate itself.
V on Shenton is one of the latest residential-cum-commercial projects to hit the market in the downturn area.
According to its developer, sales have been brisk. Nearly 80 per cent of the 230 units released have been sold, as of 6 August.
The development comprises 510 residential units and an office tower.
On average, the selling price for each residential unit at V on Shenton ranges between S$2,200 and S$2,300 per square foot.
United Industrial Corporation Limited’s group general manager, Michael Ng, said: “This is going to be the new financial heart of Singapore, linking to Asia Square and MBFC (Marina Bay Financial Centre), the entire Marina Bay area, and there’s also the new Gardens by the Bay.”
And market watchers said the draw of downtown living has pulled in home buyers and won over the developers.
According to the Urban Redevelopment Authority, there are about 1,700 completed residential units and another 2,900 units in the pipeline in the Shenton Way/ Tanjong Pagar area, as of the second quarter this year.
Jones Lang LaSalle’s head of research, Chua Yang Liang, said: “If you compare over a decade, commercial land prices – using DC (development charge) rates – have increased by about 70 per cent. Correspondingly, residential land prices have eased up over 250 per cent. That’s because to begin with, residential land prices based on DC rates at that time were much lower. That gave the developers the impetus to change some of the uses in the market.”
Dennis Wee Group’s senior manager for research & consultancy, Lee Sze Teck, said: “Generally we see more investor type of buyers. They are in there mostly for the rentals. In this low interest rate environment, generally the rental yield that they get is able to cover the instalment that they are forking out every month.”
Experts said the rental yield for private residential properties in the city area hovers around 3 to 3.5 per cent, and this could climb marginally over the next few years.
Apart from more mixed-use developments, more changes are lined up in Shenton Way and nearby Tanjong Pagar.
The URA said building owners will provide a wider sidewalk and additional tree planting to improve the pedestrian experience; and more public spaces will be introduced at the Choon Guan Street development, similar to those at Asia Square Towers, to allow for activities such as exhibitions and performances.
All these are part of plans to rejuvenate the central business district.
Some industry players told Channel NewsAsia that developers and architects overseeing projects around Shenton Way area have been informed by the authorities to make provision in the basement.
Responding to Channel NewsAsia, the Land Transport Authority (LTA) said it works with various agencies to provide provisions in new buildings for future connectivity. It is unable to provide further information as details of future Rapid Transit Systems lines are still being finalised.
Source : Channel NewsAsia – 12 Aug 2012