One-North Residences hits $1,399 psf

The one-north area is coming alive with the opening of the One-North Circle Line MRT station and the recent completion of The Rochester, a mixed-use development by United Engineers with 366 apartments including SOHO-style lofts, a 271-room business hotel- cum- serviced suites called Park Avenue Rochester and a 10,000 sq ft mall called Rochester Mall. The 99-year leasehold development is also within walking distance of the Buona Vista MRT station. Retail and entertainment zone VistaXchange is located next door. Scheduled to open later this year, VistaXchange has a net lettable area of 164,906 sq ft and is developed by CapitaMalls Asia.

“There’s a lot going on in the area and the newly completed projects such as The Rochester and One- North Residences are definitely bringing a buzz to the neighbourhood as residents move in,” says Kelvin Tan, a property agent from One International Real Estate. While the up-and-coming neighbourhood is seeing increased interest among local buyers, foreign buyers are shying away from making property purchases — largely in reaction to the government’s property cooling measures introduced on Dec 8. The main deterrent is the additional 10% buyer’s stamp duty imposed on foreigners buying residential property. “Foreign and PR investors have been showing very little interest, if any, in the one-north area since the new measures were implemented,” says Alfie Isa, head of residential at Aptitude Real Estate Advisory.

Even though the residential market has turned quieter, there were still a number of transactions in the neighbourhood. At The Rochester, the most recent transaction was the sub-sale of a 1,302 sq ft two-bedroom unit on the 10th level, which changed hands for $1.8 million ($1,382 psf). The seller had purchased it in August 2007 for $1.22 million ($936 psf), thus making a 47.7% gain.

When The Rochester was launched in July 2007, units were sold at an average price of $1,300 psf. Another new condominium in the vicinity, the 405- unit One-North Residences was launched just a few months earlier in March 2007, and the average price then was $900 psf. One-North Residences, developed jointly by UOL Group, Low Kheng Huat and Kheng Leong, was completed in 2009. In December, there were three caveats lodged with URA Realis (as at Jan 4, 2012), and transaction prices ranged from $1,351 to $1,460 psf. However, prices are still nowhere near the $1,680 psf achieved for a 2,540 sq ft four-bedroom unit, which changed hands in a sub-sale at the previous peak in August 2007, nor the $1,625 psf achieved when a 1,302 sq ft two-bedroom apartment was sold by the developer at the same time for more than $2.1 million.

The most recent transaction was the resale of a 980 sq ft two-bedroom unit for $1.4 million ($1,399 psf). The seller purchased it in May 2007 for $920,000 ($939 psf), making a 52% gain in less than five years. On the third level of the same block, a 1,033 sq ft two-bedroom unit changed hands for $1.3 million (1,258 psf). The previous owner had bought it for $873,852 ($846 psf) in September 2007, thus making a 48.8% gain.

Subsequent to the sale, a 1,109 sq ft two-bedroom unit on the eighth floor was transacted for $1.5 million ($1,375 psf), the third time the unit has changed hands. The first owner bought it for $962,822 ($868 psf) in April 2007, when the project was launched. He sold the unit two months later for $1.12 million ($1,008 psf), a price appreciation of 16%.

Aptitude’s Isa says the average asking price for One-North Residences is $1,400 psf now, whereas it ranges from $1,350 to $1,500 psf at The Rochester.

Prior to the government’s cooling measures, many foreigners working at the Biopolis biomedical hub and at Fusionopolis, the infocommunication technology, media and physical sciences and engineering hub, at one-north had been interested in buying units at One-North Residences. “They were mainly looking to buy for their own [use], and therefore preferred new apartments,” says Nicole Lim, senior team director at ERA Realty. “However, most of the units put up for sale at One-North Residences are already tenanted.”

At One-North Residences, two-bedroom apartments fetch rental rates of about $5,000 a month. At The Rochester, two-bedroom apartments of a similar size fetch about $500 more, notes Lim. Generally, investors at both One-North Residences and The Rochester are looking at rental yields of 3%, she estimates. “While there’s still interest, it’s a little quieter now,” she adds.

With new condos such as One-North Residences and The Rochester fetching $1,200 to $1,500 psf, some investors are gravitating towards older condos in the area, where prices are still hovering around the $1,000 psf range, notes Lim. Based on the lower quantum prices, the rental yields for such condo units in developments such as Normanton Park and Dover Parkview tend to range from 3.5% to 4%.

At the 686-unit, 99-year leasehold Dover Parkview, which was completed 15 years ago, the most recent transaction was for a 936 sq ft two-bedroom apartment that changed hands for $980,000 ($1,046 psf). This is the third time the unit has changed hands. The first owner had bought it for $700,000 ($747 psf) in October 1996 and sold it in June 2009 for $690,000 ($737 psf). The most recent transaction of $1,046 psf is one of the highest prices achieved in the condo so far. The highest average price achieved at Dover Parkview was last September, when a 936 sq ft unit changed hands for $1 million ($1,068 psf).

Also at Dover Parkview, a 969 sq ft two-bedroom apartment changed hands for $904,500 ($934 psf) in December. The previous owner had paid $632,000 ($652 psf) for the unit in April 1996. One International’s Tan, who brokered the sale of a unit at Dover Parkview recently, says most buyers do not mind the older condos in locations such as Dover Rise, as these units tend to be spacious and the absolute prices of about $1 million are also more palatable compared with those at newer condos. “These older condos represent value,” he says. “Investors who want space but do not wish to overstretch their budgets are more inclined to buy units in older condos.”

Another condo that is also favoured by investors is the 35-year-old Normanton Park. The 99-year leasehold condo is located off Ayer Rajah Expressway and near the Science Park. Based on the caveats lodged with URA Realis, the most recent transaction recorded was the sale of a 1,270 sq ft unit on the sixth level for $1.3 million ($992 psf). The seller, who purchased it for $500,000 ($394 psf) in September 1999, saw the price almost triple in just over a decade.

Source : The Edge – 9 Jan 2012

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