SINGAPORE (EDGEPROP) -Five years ago, Julie Seah bought her home at Kensington Park Condo: a 1,582 sq ft, three-bedroom duplex. She had renovated it extensively before moving in. Her unit is in the only all-duplex block at Kensington Park, with lift access to both floors of each duplex.

See also: Kensington Park condo launched for collective sale at $1.28 bil

The balcony of Seah’s 14th-floor unit has an unblocked view of the Serangoon Gardens landed estate with Bishan in the distance. Standing out against the skyline is Sky Habitat in Bishan, the architectural landmark by Moshe Safdie, famous for his design of Marina Bay Sands.

Prior to moving to Kensington Park, Seah had lived in an apartment overlooking Bishan Park. And she had found it hard to part with that view. When house-hunting five years ago, she reckoned that having a great view was as important as the location.

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After looking at two other units at Kensington Park, Seah walked into her current home, saw the view and was immediately sold. Indeed, the view from her living room has been roundly endorsed by her friends. “When they visit me, they go ‘wow’ as soon as they walk in,” says Seah.

Besides the view, there’s also the food: restaurants and cafes near the Serangoon Garden Circus and food stalls at Chomp Chomp food centre, which is turning 50 this year. Seah likes the fact that she can cycle or jog around the estate, or all the way to Bishan Park and back, a total trip of just 5km.

Shortly after she moved in, the owners of Kensington Park had attempted a collective sale. It was sometime in early 2018 before the cooling measures kicked in that July. Only 69% of the owners at the 316-unit private condo agreed to a collective sale, and it was aborted.

Strong sales in the neighbourhood

The tide turned earlier this year, with over 80% of the owners consenting to a collective sale. On May 18, Kensington Park was launched for public tender with CBRE as the exclusive marketing agent. The guide price was set at $1.28 billion. Including development charge (DC) of $178.1 million, the price translates to $1,411 psf per plot ratio (psf ppr). Taking into consideration the 7% bonus gross floor area for balconies and a DC payable of $232.1 million, the land rate will be lower at $1,371 psf ppr.

Residential sales in the neighbourhood of Serangoon Gardens have been strong, notes Michael Tay, CBRE head of capital markets, Singapore. Adjacent to Kensington Park is the 613-unit The Garden Residences by Wing Tai Holdings. Launched in May 2018, the project was fully sold within three years. The 99-year leasehold condo was completed last year and owners have already moved in.

Nearby is the 1,052-unit Affinity at Serangoon, a redevelopment of the former Serangoon Ville, privatised HUDC (Housing and Urban Development Co) estate. The 99-year leasehold condo, by a consortium led by Oxley Holdings, has been almost fully sold since its launch in June 2018. Only two units remain unsold, based on caveats lodged as at June 7. Hence, the project is 99.8% sold.

“Within District 19, where Kensington Park is located, there are limited 999-year or freehold new developments for sale,” says CBRE’s Tay. Kensington Park has three low-rise blocks (No. 2, 4, 6) and three high-rise blocks (No. 8, 10 and 12) sitting on a sprawling 491,000 sq ft, 999-year leasehold site.

Unsold, freehold stock in the OCR depleting

The closest new projects that are either 999-year or freehold are The Gazania, a freehold, 250-unit condominium at How Sun Drive; and The Lilium is a freehold, 80-unit condominium at How Sun Road. Both are developed by SingHaiyi Group and expected to be completed later this year.

To date, The Gazania is 45.2% sold, based on caveats lodged as at June 7. A total of 31 units were sold in May at an average transacted price of $2,236 psf, based on caveats lodged. The highest psf price achieved was $2,526. Meanwhile, 36 units were sold at The Lilium to date, bringing the sales rate to 45%. Average price of units sold last month was $2,105 psf, with the highest price achieved of $2,406 psf. Hence, the number of unsold freehold units in both projects totals just 186 to date.

“Unsold units which are of freehold tenure and in the Outside Central Region [OCR] are few and far between,” says Tricia Song, CBRE head of research for Southeast Asia. Based on projects that have been launched, only 337 freehold non-landed units in the OCR remain unsold as of end-April, she adds.

Kensington Park’s land size of 491,000 sq ft and plot ratio of 2.1, with a building height control of 24 storeys, means that the permissible number of units to be built is well over 1,000. “Given the trend of housing demand since Covid, a developer is likely to build larger residential units,” CBRE’s Tay says. “And that could translate to fewer units.”

Besides owner-occupiers, the location is likely to appeal to investors too, given that the International French School is within walking distance and Australian International is also nearby. “There is already a strong French and Australian expatriate community within Kensington Park,” says Clemence Lee, CBRE executive director, capital markets, Singapore. “And that means an active rental market, with almost half the existing units being tenanted.”

The upcoming Tavistock MRT Station and Serangoon North MRT Station, both sitting on the Cross Island Line, are scheduled for completion in 2030. They are located near Kensington Park, and that is a bonus for future residents, adds Lee.

‘Time for change’

Some existing unit owners at Kensington Park, like banker Frank Lim, are of the opinion that after having lived there for over a decade, it’s time for a change. “We would be happy to live here, as the development is still very well-maintained and in fairly good condition after so many years,” he says. “But typical of older condos, we have had neighbours’ homes leaking into our condo twice, and our condo also supposedly leaked into the unit downstairs, although it was found out later that the leak wasn’t from our unit.”

Kensington Park is already 32 years old, having been developed and constructed by Lum Chang back in 1990. In fact, Lum Chang took over the project after the original developer had gone bust.

Lim is not waiting for Kensington Park’s collective sale to go through before buying his next property. “I have already been looking around, and have noticed that prices have risen quite significantly,” he says. His preference is still for relatively large units in either a 999-year leasehold or freehold development. And he wants to remain in the neighbourhood.

Lim has done his search for other freehold sites in the area, although none is comparable to Kensington Park in terms of scale. Examples include the 108-unit Nouvelle Park on Poh Huat Road (completed in 1994); the 163-unit Cherryhill Condo at Lorong Lew Lian by developer Wing Tai Holdings (completed in 1994); and the 390-unit Goldenhill Park Condo at Mei Hwan Drive, developed by City Developments (completed in 2004).

Now that his children are 21 years old and legally adults, Lim recently bought a property in one of his children’s names. “The downside is that they will not have the opportunity to purchase an HDB flat in the future,” he says. “But by the time they get married, property prices could have doubled.”

Buying back

Lim is open to another option: Buying a unit in the new development should the collective sale go through. “As previous owners of Kensington Park, we are given the option to select a unit first,” he says. “If the price of the new development is about $2,000 psf, we would consider. We are also prepared to get a smaller unit as the new development is likely to have smaller units.”

Many of the owners of Kensington Park have expressed similar sentiments. “A lot of people at Kensington Park are hoping to get a unit back in the future,” says CBRE’s Lee. “In the northeast (District 19), people who have lived in the neighbourhood for many years tend to be attached to it.”

One resident who has been there for 32 years is Mrs Lau. Her brother-in-law had purchased a walk-up apartment at Kensington Park, but she wanted a high-floor unit. “I was living in a high-rise HDB flat in Bedok at that time,” she says.  (Find HDB flats for rent or sale with our Singapore HDB directory)

Her current home at Kensington Park is a spacious 1,658 sq ft, four-bedroom unit that features the original flooring and fittings by the developer. From her 14th-floor unit, “I can see the Singapore Flyer and the fireworks from both Marina Bay and Bishan”, she says.

Given the surrounding Serangoon Gardens landed estate, a developer will be able to ensure that views are protected, even for the low-floor units at the site of Kensington Park, notes CBRE’s Tay.

Developers’ bids ‘encouraging’

The recent government land sales (GLS) tender closing for the Dunman Road site on June 2, where SingHaiyi Group submitted a top bid of $1.284 billion or $1,350 psf ppr, is “encouraging”, notes Tay. The price of $1,350 psf ppr is 3.7% higher than for the nearby Jalan Tembusu GLS site, which Hong Leong Group won with a bid of $1,302 psf ppr in January. The Dunman Road site is larger too, at $271,662 sq ft, with the potential to yield 1,040 units.

The price of $1,350 psf ppr from SingHaiyi is also 9.3% below the $1,488 psf ppr paid by Hoi Hup Realty and Sunway Developments for the freehold Thiam Siew Avenue en bloc site last November, CBRE’s Song points out.

There was a marked slowdown in collective sale activity in 1Q2022, following the cooling measures implemented on Dec 16, 2021. However, four sites were sold en bloc in the first three months of the year for a total of $992.5 million. Three of the deals were of residential en bloc sites, sold at prices from $27 million to $70.3 million. (See potential condos with en bloc calculator)

In 2Q2022, another four collective sale deals were successful, including a block of apartments on Haig Road that was sold for $49.3 million in April. It was 3% above its reserve price of $48 million. In May, two 99-year leasehold projects were successfully sold en bloc. One was Golden Mile Complex, sold for $700 million, below its reserve price of $800 million. The buyers are a consortium made up of Perennial Holdings, Sino Land and Far East Organization. It is the first collective sale that includes conservation.

The latest collective sale deal that went through was Lakeside Apartments, sold to Wing Tai Holdings for $273.9 million, which was 14% above its reserve price of $240 million. Based on the land rate estimated at $1,250 to $1,260 psf ppr, the selling price of the new condominium on the site is likely to be close to $2,000 psf. “The site appealed to developers due to its proximity to Jurong Lake District and the relatively limited supply of new private residential projects in the Lakeside area,” notes CBRE’s Song.

She adds: “Attractively-priced sites with good locational attributes would likely continue to see healthy interest from developers.”

The tender for Kensington Park will close on July 7. Homeowner Seah admits to having mixed feelings. “I’m happy because the collective sale would benefit the owners, but sad in the sense that this is a pleasant place to live in, and it’s convenient,” she says. “Maybe we will buy back a unit from the developer in the future.”

Check out the latest listings near Kensington Park Condominium, The Garden Residences, Affinity at Serangoon, The Gazania, The Lilium, Lakeside Apartments, Tavistock MRT Station, Serangoon North MRT Station

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