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Scaling new heights at Mount Sinai

Some of the savviest property investors in Singapore seem to come from the medical profession. A classic example is Mrs Chua, a 62-year-old retired nurse turned entrepreneur who owns a holistic spa. Together with Mr Chua, who’s also in the medical profession, they snapped up two units at The Trizon in a private preview two weekends ago on the recommendation of their Knight Frank agent. They bought a three-bedroom and a four-bedroom apartment on the 19th floor of Tower 2 for S$2.55 million (RM6.2 million) and S$2.85 million, respectively. “One unit is for my daughter and the other for my husband, my son and me,” says Mrs Chua, a mother of two and grandmother of five.

Mrs Chua, who lives in a house on Jalan Arnap in the prestigious One Tree Hill estate off Grange Road, admits to owning “quite a few properties” in the prime central districts. She sold her bungalow on Kheam Hock Road, located off Adam Road, for S$5.4 million earlier this month even though the rental was S$15,000 a month. “Bungalows require more maintenance and there’s always something to be repaired,” she says. “From the proceeds of the bungalow, I figured I could buy those two apartments [at The Trizon] because of their location and design.”

The fact that The Trizon is only going to obtain Temporary Occupation Permit (TOP) in 2013 provides flexibility, as Chua says she can take her time to think about whether she would like to hold the apartments as an investment or to move into one of them.

Around 90% of Singaporeans who bought units at The Trizon are said to have private-property addresses. “What’s more, about half of those with private-home addresses are in the prime districts of 9 and 10,” says Vito Koh, group general manager of Singapore Land (SingLand), the developer of Trizon, and parent company United Industrial Corp (UIC).

The son and sister of Gwee Lian Kheng, president and CEO of UOL Group,purchased one unit each, according to a Sept 3 filing. Both are 1,012 sq ft two-bedroom apartments priced at S$1.375 million each. Incidentally, Gwee also sits on the boards of directors of SingLand and UIC. Billionaire banker and property magnate Wee Cho Yaw and Philippine tycoon John Gokongwei Jr are substantial shareholders of UIC. As at Sept 8, UIC held a 73.52% stake in SingLand.

Koh reckons that the majority of the buyers at The Trizon are owner-occupiers, with some, like Chua and Gwee, buying for their children. Others are said to be “empty-nesters” currently living in bungalows in the prime districts and whose children have all grown up and left home. They are, therefore, looking for a new home that requires less maintenance, says Koh.

With more than 120 units sold in private previews, SingLand officially launched the 289-unit The Trizon on the weekend of Sept 12 and 13. The prices for units in the new project, built on the former Himiko Court site, are from S$1,250 to S$1,550 psf, which is 2% higher than the prices at the private previews, says Koh.

The entire project comprises three 24-storey towers located on a freehold land area of 195,000 sq ft. A large proportion of the grounds — 85% — is dedicated for facilities and landscaping. Designed by renowned architectural firm Palmer & Turner, the three towers are raised four levels above an already elevated ground, and oriented in such a way that almost all the units have unobstructed views of either the city or even the sea beyond, says Koh.

Last year, anticipating a demand for smaller units, one of the three towers (Block 8) was reconfigured to contain sized-down two- and three-bedroom units. “But, these are not those small Mickey Mouse type of units,” emphasises Koh. Two-bedroom apartments in Block 8 are still larger than the average two-bedroom apartment in new condominiums, with sizes ranging from 1,012 to 1,044 sq ft. Three-bedroom apartments measure 1,550 to 1,593 sq ft. The four penthouses in this tower are from 1,776 to 2,917 sq ft.

In comparison, the other two luxury towers (Blocks 2 and 6) offer mainly large three- and four-bedroom apartments and penthouses. For instance, the smallest units in the towers are the 2+1 bedroom types, ranging from 1,195 to 1,346 sq ft. Three-bedroom apartments are 1,894 to 2,110 sq ft and four-bedroom units are 1,959 to 2,314 sq ft. Even the penthouses in these two towers are larger than those in Block 8, ranging from 4,919 to 7,083 sq ft.

Koh says about 20% of the buyers in the development are foreigners, mainly from Indonesia and Malaysia, as well as Australia, the UK, France, China, the Philippines and India. This is reflective of the trend where foreign demand has increased moderately since hitting a trough in March, says DMG & Partners’ property analyst Brandon Lee in a Sept 8 report. “While July 2009’s offshore composition [of total demand] of 11% represents five percentage points off the 16% during the last property upcycle in 2007, we believe several factors point to the cusp of a prime recovery,” he says.

Lee points to strong take-up rates for recent launches and re-launches at Belle Vue Residen­ces, Madison Residences, VIVA and Volari. “Anecdotally, turnout remained healthy for showflats across all segments, accompanied by a rising contingent of regional foreigners from China, Indonesia and Malaysia. Lastly, the proportion of purchasers with private-home addresses is gradually approaching 2007’s levels.”

Jerry Tan, managing director of JT Resi, a marketing specialist in exclusive residential developments, showcased The Trizon in a roadshow in Jakarta last month. In just two days, 27 units were sold, mainly the large three- and four-bedroom units, including four penthouses in the two luxury towers.

The 11 penthouses at The Trizon have all been snapped up at private previews in Singapore and Jakarta, according to Koh. Prices of the penthouses ranged from S$2.5 million for the smallest one (1,776 sq ft) to S$7 million for the largest (7,083 sq ft). Every penthouse comes with a private swimming pool.

One of the buyers of the penthouses is Thomas Lapping, a Perth-based real-estate agent who specialises in marketing multi-million-dollar homes in Australia. Lapping purchased a 5,102 sq ft penthouse on the 22nd floor of Block 6 purely on the recommendation of Tan, a good friend of his. Both Lapping and Tan liked the penthouse so much that they decided to be co-owners of the S$5 million five-bedroom unit. Their penthouse is one of only two that are on a single level. The other nine are duplexes.

“A single-level penthouse is hard to come by,” says Tan. “I like the flow of the apartment, with all the five bedrooms located on one side and the living and dining rooms on the other. All the five bedrooms also come with en-suite bathrooms.” Another feature is the layout and design of the living and dining areas, which have high ceilings and open out onto the roof terrace and a private swimming pool. Being on the 22nd floor also ensures good views and exclusivity.

An astute property investor, Tan typically buys units in exclusive projects in the prime central region. In Singapore, his focus has traditionally been on the Grange Road neighbourhood in District 9. Hence, The Trizon at Mount Sinai, which is in District 10 — still a prime district — was not on his radar. “I like the development because of the land area,” he says. “Although there are 289 units in the development, the towers are well spaced out to ensure exclusivity and privacy.”  


A new price benchmark
Prior to the collapse of Lehman Brothers in September last year, Koh says the developer had initially planned to price The Trizon at about S$1,500 psf. But, even at the current price level of S$1,250 to S$1,550 psf, the project is still setting a new benchmark for the Mount Sinai neighbourhood.

Across the street from The Trizon is Ridgewood condo, where a 1,744 sq ft apartment recently changed hands in the resale market for over S$1.5 million, or S$869 psf. Ridgewood is a 999-year leasehold condo completed in 1981, and some of the strata-titled owners there had also harboured ambitions of going en bloc two years ago with a price tag of S$1.1 billion after SingLand purchased Himiko Court. At Mount Sinai Rise, units at The Marbella, a freehold condo completed in 2005, changed hands on the resale market at prices ranging from S$895 to S$1,186 psf last month.

Knight Frank and Savills Singapore are the joint marketing agents for The Trizon in Singapore. According to Peter Ow, executive director of residential department at Knight Frank, one of the key attractions of the project is the design of the master bedroom and en-suite bathroom in the three- and four-bedroom apartments, as well as the penthouses in Towers 2 and 6. The master bedroom has a double-volume ceiling height of 7m, and the bathroom comes with a sunken bath, shower stall and water closet compartment. The branded sanitary fittings include customised Spanish luxury brand Lladró porcelain taps.

The large freehold site of The Trizon is pretty much in line with the half a dozen other freehold en-bloc sites that UIC and SingLand purchased in 2005/06, when Koh, who joined UIC on Jan 1, 2005, turbo-charged the residential development arm. While SingLand was an established property developer and commercial landlord, prior to Koh’s arrival, it had developed only three residential projects in the past decade, namely, the 88-unit The Paterson, 28-unit Stevens Loft and 74-unit The Belleforte on Balestier Road. SingLand’s main income stream came from its stable of commercial properties which included Singapore Land Tower at Raffles Place, The Gateway at Beach Road and Marina Square retail mall. Meanwhile, UIC was known more for its detergent and household toiletry products than its prowess as a property developer prior to 2005.

In fact, Himiko Court was the last en-bloc purchase made by the group two years ago when it paid S$336 million, or S$821 psf, for the site in May 2007. “Since then, we have stayed under the radar because we didn’t feel that the market was sustainable at the price levels seen in 2H2007,” says Koh.


Fully sold projects to get TOP by next year
To date, both SingLand and UIC have launched a total of seven projects, including The Trizon. Six were launched in 2006/07 and are fully sold. The exception is Park Natura in Bukit Batok, where less than 10 units of a total of 192 are still available. What’s more, these projects will be completed by year-end or early 2010. “So, our cash flow for the next three years will be quite good even if we don’t launch anything else,” says Koh.

Park Natura, which sits on the former HJ Heights condo site overlooking the Bukit Batok Nature Reserve, was launched by UIC in October 2007, and as end-2007, the median price of units sold was S$945 psf. The project is expected to be completed next year, and in the last two months, two units have changed hands in sub-sales at S$950 psf.

The other launch in 2007 was Northwood, a 140-unit freehold condo located off Sembawang Road. The site (the former Gardenia Court) was purchased en-bloc by UIC for S$49 million in 2005. Launched in early 2007, the project was fully sold in three weeks at an average price of S$600 psf. It is expected to obtain Temporary Occupation Permit (TOP) next month. In August, a unit changed hands on the sub-sale market at S$624 psf.

Another project, the 175-unit Sixth Avenue Residences, is a joint venture between SingLand and Keppel Land. It was fully sold within two weeks of its private previews held in late December 2006, at an average price of S$1,000 psf. The project also received its TOP this year. Last month, sales of units on the secondary market were transacted at prices in the range of S$1,200 to S$1,280 psf.

One Amber, the massive 562-unit condo project located at the site of the former Maryland Park in East Coast, was an en-bloc purchase jointly made by SingLand, UIC and UOL Group. Launched in April 2006 at an average price of S$750 psf, it was fully sold within a few months. The project is expected to be completed in early 2010. Last month, units had changed hands in sub-sales at S$1,000 to S$1,188 psf.
Another sell-out project was the 158-unit Regency at Tiong Bahru, a joint-venture development by UOL Group and UIC. When launched in October 2006, average price was S$850 psf. The project is expected to obtain TOP before year-end. In sub-sales in the last two months, transactions have been in the range of just under S$1,000 to S$1,200 psf.

A project that was sold out in 36 hours was UIC’s 121-unit Grand Duchess at St Patrick’s Avenue. It was launched in 2006 at an average price of S$750 psf. Units have changed hands at S$958 to S$960 psf in the last two months. The project is expected to be completed either end of this year or early next year.
UIC’s Koh says while the group is actively looking for sites, it is in no great hurry to jump in. He prefers to buy sites via private treaty, but admits that they are hard to come by these days. “When the price is right, we will buy,” he says. “As a group, we don’t buy high and then have to do a writedown [when market value drops].” He is also open to buying sites in the government land sales programme.

Whether the current upturn is sustainable will depend very much on developers’ pricing of projects, reckons Koh. “If developers step up prices too quickly, like what we saw in 2007, the market will not be sustainable, but if it’s a slow and gradual increase, it will be sustainable.”

Koh says the success of a launch depends very much on three factors: knowing who your target audience is, what kind of units to design based on the location and target audience, and pricing the project right. “We always design projects from inside out,” he adds. “The apartments are where the residents will ultimately be spending a lot of their time, and we have to build something that people will want to live in, so we spend a lot of time planning the layout and configuration of the apartments.”

Cecilia Chow is City and Country editor at The Edge Singapore

 

This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 773, Sep 21-27, 2009.

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