Balloting of units at The Alps Residences brought forward

/ The Edge Property |

September 30, 2016 10:17 AM SGT

Like everyone else, Tan Zhiyong, managing director of MCC Land, the developer of The Alps Residences, had to jostle his way into the sales gallery of the private condominium project on the weekend of Sept 24 and 25. More than 1,100 groups were said to have visited the sales gallery on Tampines Street 86, off Tampines Avenue 10. Anecdotal evidence was that the traffic warden had a field day on the afternoon of Sept 24 booking the cars parked illegally along the side of the road outside the sales gallery.

About half the visitors to The Alps Residences sales gallery at the weekend preview were said to be those living in the Tampines area, with the remainder from other parts of the eastern region of Singapore, such as Bedok, Changi, Pasir Ris and Simei.

Having observed the crowd at The Alps Residences, MCC Land’s Tan decided to bring forward the balloting of units to Oct 2 instead of a week later as originally planned. “We have never seen such a good turnout at our launches, and they seem to be genuine buyers,” he says.

Tan: We have never seen such a good turnout at our launches. And they seem to be genuine buyers.

The weekend of Sept 24 and 25 also saw the preview of Forest Woods, a 519-unit private condo located on Lorong Lew Lian, off Upper Serangoon Road. The joint developers of the project are City Developments Ltd, Hong Leong Holdings and TID Pte Ltd. Crowds were snaking their way into the sales gallery of Forest Woods, located adjacent to nex shopping mall.

“It looked as though half of Singapore was either at The Alps or Forest Woods showflat last weekend,” says Jack Chua, CEO of ERA Realty. “Even the agents were surprised by the overwhelming response.”

It is likely the locations of The Alps Residences and Forest Woods that generated interest from prospective buyers, says Ong Teck Hui, JLL national director of research. Alps Residences, being a heartland development, would appeal to HDB upgraders, especially since it is located in Tampines, a mature HDB town with plenty of amenities within easy reach, reckons Ong. Forest Woods’ attraction is its proximity to the Serangoon MRT interchange station and nex shopping centre. “Given the keen interest in these projects, strong sales are likely, provided the units are priced realistically,” he adds.

Owing to improved sentiment, the perception that prices could have bottomed and the government reiterating that it is too early to unwind the property cooling measures, total transaction volume of private homes in the first eight months of this year was 4.2% higher than that for the same period in 2015, according to JLL Research. “Since the softening of the market in 2013, many potential buyers have stayed on the sidelines, hoping for a drastic fall in prices and for the measures to be lifted, both of which did not occur,” says Ong. “Some of these buyers have returned to the market, contributing to pent-up demand.”

More than 1,100 groups were said to have visited the sales gallery of The Alps Residences over the preview weekend

The model of The Alps Residences, where the poolside and garden pavilions are inspired by ski chalets

No new launches since The Santorini

MCC Land’s Tan attributes the strong showing at The Alps Residences’ weekend preview to the dearth of suburban private condo launches in the east, particularly in the Tampines area. There has not been a new private condo launch in Tampines in 2½ years, not since The Santorini (also by MCC Land), which was rolled out in April 2014.

Also located on Tampines Street 86, The Santorini is separated from The Alps Residences by a development site (Parcel C) that is on the Reserve List of the government land sales (GLS) programme. So far, about 245 out of a total of 597 units at The Santorini have been sold. The project is scheduled for completion next year.

The Santorini has a mix of one- to five-bedroom units ranging from 463 to 1,378 sq ft. It also has two- to four-bedroom dual-key units ranging from 904 to 1,421 sq ft. Four- and five-bedroom penthouses are between 1,313 and 1,604 sq ft, while garden duplexes are between 1,787 and 1,991 sq ft. Based on transactions in August and September, units have been sold at prices ranging from $985 psf to $1,192 psf. In terms of absolute prices, units sold have ranged from $540,000 for a 463 sq ft, one-bedroom unit to $1.46 million for a 1,378 sq ft, five-bedroom unit.

To differentiate The Alps Residences from The Santorini, MCC Land is offering different unit configurations. At The Alps Residences, there will be 56 one-bedroom units of 441 and 463 sq ft, 126 one-bedroom-plus-study units of 495 and 506 sq ft, 183 two-bedders of 689 and 700 sq ft, 55 two-bedroom-plus-study units of 689 sq ft and 178 three-bedders of 936 to 1,087 sq ft.

The Alps Residences does not have dual-key units, unlike The Santorini. However, it has one-bedroom-plus- study units, sizeable four-bedroom units (1,410 sq ft), as well as four- and five-bedroom penthouses of 1,668 to 2,486 sq ft. “There are many variations in unit types in both developments to provide choices for buyers,” says Tan.

The showflat of a typical three-bedroom unit at The Alps Residences

The showflat of a one-bedroom-plus-study unit, the most popular unit type among buyers

Pricing and product differentiation

MCC Land won the site for The Alps Residences (formerly Tampines Avenue 10 Parcel D) with a bid of $227.8 million in a government land tender last year. It was the highest of 12 bids. The price translated into $482 psf per plot ratio (ppr), which is 14.1% lower than the $562 psf ppr that the developer paid for Parcel B (now The Santorini) in July 2013.

The lower land cost translates into slightly lower sale prices at The Alps Residences. The indicative price range for The Alps Residences is said to be from under $1,000 psf to $1,200 psf, compared with The Santorini’s sale prices two years ago, which hovered around $1,100 psf, and hit a high of $1,274 psf, according to caveats lodged with URA Realis.

“The prices at The Alps Residences are reasonable in today’s market,” says ERA’s Chua. Incidentally, ERA Realty and Huttons Asia are the joint marketing agents for The Alps Residences.

The most popular units at The Alps Residences appear to be the one- and one-bedroom-plus-study units. This is because one-bedroom units start from $491,000, while one-bedroom-plus-study units are priced from $536,000. Two-bedroom units start from $691,000, three-bedroom units from $918,000 and four-bedroom units from $1.38 million. The one-bedroom-plus-study-units appeal not just to singles and young couples, but also to empty-nesters who want to downsize to smaller apartments. The one-bedroom-plus-study unit is attractive as the study is big enough to fit a single bed and can therefore be converted into a second bedroom if needed, explains Tan.

To further differentiate its projects from the others in the neighbourhood, MCC Land has paid a lot of attention to the layout of the units, the architectural design and landscaping. The Alps Residences, for instance, is designed by Group 8 Architects, founded in Geneva 16 years ago. The architect has taken inspiration from the Swiss Alps, with the pool cabanas and garden pavilions designed like ski chalets and balconies with a snow-cap design motif.

Meanwhile, The Santorini is designed by AGA Architects and capitalises on the water views. “There are advantages to having two projects launched in the same area,” says Tan. “By delivering good-quality projects, buyers will be able to enjoy future capital appreciation.”

The master bedroom, bathroom and adjoining study

The showflat of a two-bedroom unit

Tampines draw

Tan’s confidence in Tampines stems from the fact that it is a mature regional centre and it is difficult to secure a good mass-market condo development site. Near Tampines is Changi Business Park, which has developed into a financial backroom operations and global services hub. Tampines is also where big-box retail centres such as IKEA, Courts Megastore and Giant Hypermarket are located.

The Santorini and The Alps Residences are located in Tampines North, across the road from the Tampines Quarry. The private condos are also near the United World College SEA East Campus on Tampines Street 73.

Other private condos in the area are the 696-unit Waterview by Sim Lian Group, which was launched in 2010 and completed in 2014. Frasers Centrepoint and Keong Hong Construction launched Q Bay Residences in 2013 and completed the 630-unit private condo earlier this year. Both projects are fully sold.

At Q Bay, a 527 sq ft, one-bedroom unit changed hands for $650,888 ($1,234 psf) in July. The unit was purchased for $550,550 ($1,044 psf) in February 2013. Both the buyer and the seller have HDB addresses. Another resale at Q Bay in July was that of a 1,410 sq ft, four-bedroom unit. It was sold for $1.4 million ($993 psf). The unit was purchased for just under $1.5 million ($1,063 psf).

Meanwhile, there were three transactions at Waterview in July and August. The most recent transaction in August was the resale of a 786 sq ft, two-bedder that fetched $800,000 ($1,018 psf). The unit sold for $701,000 ($892 psf) in December 2010. A 1,184 sq ft, three-bedroom unit changed hands for $1.225 million ($1,035 psf) in July. It was sold for $1.08 million ($909 psf) in December 2010 when the project was first launched.

The 574-unit executive condo The Arc at Tampines by Hoi Hup and Sunway was completed in 2014, and will be fully privatised — like the other 99-year leasehold condos in the neighbourhood — by 2024. The most recent sale was in December last year, for a 1,076 sq ft, three-bedroom unit that went for $800,000 ($743 psf).

A short drive from Tampines Avenue 10 is the My Tampines Hub, an integrated lifestyle and sports centre built on the site of the former Tampines Stadium and Sports Hall. The first phase is scheduled to open in November, with the whole facility fully operational by next June. Facilities include a library, gym and jogging track. There will also be a sports hall with badminton courts, a bowling alley and a giant food court with 800 seats and 42 food stalls.

According to the Department of Statistics, Tampines is one of the four planning areas in Singapore with a population exceeding 250,000. The other three are Jurong West, Woodlands and Bedok, which is the largest with 289,750 residents as at end-2015.

“I’ve always liked Tampines,” says MCC Land’s Tan. “And I’m confident of the location.” While MCC Land is not likely to activate the launch of the site at Tampines Avenue 10 Parcel C, Tan says the developer will certainly submit a bid if the site is triggered for sale.

Launch pipeline

To be launched next month is Queens Peak Residences, a collaboration between MCC Land and Hao Yuan Investment. The 736-unit Queens Peak will have a mix of one- to four-bedroom apartments and penthouses with five or six bedrooms. The project will include a shop unit and a child care centre. Located on Dundee Road, Queens Peak is adjacent to the Queenstown MRT station, and will be linked to it by a bridge.

Hao Yuan Investment won the development site in a government tender in June last year with a bid of $483.18 million ($871 psf ppr). MCC Land is targeting to preview the project in mid-October.

Queens Peak will be positioned as an upper-end condo, with marble flooring for the bigger units and SMEG kitchen appliances as well as Kohler fittings for all the units. The project will be pitched at a higher-end segment relative to Poiz Residences, says Tan.

Poiz Residences is a mixed-use development with 731 residential units and a 50,000 sq ft shopping mall (Poiz Centre) linked directly to the Potong Pasir MRT station. Launched towards the end of last year, about 570 units have been sold at a median price of $1,472 psf, according to URA data for the month of August.

Poiz Residences is jointly developed by MCC Land, Greatview Investment and Sustained Land. Like Hao Yuan Investment, Greatview Investment is also a mainland Chinese developer that likes to collaborate with MCC Land in projects. Besides Poiz Residences, another joint development by Greatview Investment, MCC Land and Sustained Land is the 250-unit TRE Residences on Geylang East Avenue 1.

Actively hunting for sites

Following the launch of The Alps Residences and Queens Peak, MCC Land’s pipeline of new launches will run dry. The developer is actively looking to replenish its landbank. Tan was involved in Greatview Investment’s bid for the residential GLS site on Fernvale Road. The tender closed on Sept 27.

Greatview Investment’s bid of $253.78 million ($457 psf ppr) put it in ninth place out of a total of 14 bids received. The top bid of $287.1 million ($517 psf ppr) came from Sing Holdings and Wee Hur Development. The difference between the highest and second-highest bid, which was submitted by mainland Chinese builder China Construction (South Pacific) Development was a mere $14,000 — “a difference of 0.005%, which could be the closest price gap in the history of the GLS tender,” says Nicholas Mak, executive director and head of research & consultancy at SLP International.

The top bid, however, was 15.3% higher than the land price of the adjacent Fernvale Road site (Parcel B), which is being developed into High Park Residences by Chip Eng Seng, Heeton Holdings and KSH Holdings. Launched in July 2015, the 1,390- unit High Park Residences saw nearly 1,100 units snapped up at the first weekend at prices averaging $970 psf. As at end-August, only 23 units remained unsold, with $1,143 psf being the latest median price achieved, according to URA data.

“The higher land price and strong participation rate among developers indicate that many developers are hungry for land,” says Mak.

Chinese developers were also active participants in the tender. Besides China Construction and Greatview Investment, Qingjian Realty was in seventh place with a bid of $261.78 million ($471 psf ppr), Nanshan Group in 13th place with a bid of $233.22 million ($420 psf ppr), and Kingsford Development in 14th spot with a bid of $223.23 million ($402 psf ppr).

Casting net in the region

Singapore remains MCC Land’s primary market and the developer is actively sourcing for development parcels, but Tan is cautious when it comes to bidding for sites. He is also seeking investments elsewhere in the region, such as Malaysia, Indonesia and India.

Tan is of the view that Melaka in Malaysia presents more opportunities compared with Penang, Kuala Lumpur and Iskandar Malaysia, which has attracted the most interest from both overseas investors and developers. There are now concerns about overbuilding in these markets, especially in Iskandar Malaysia, he says. Meanwhile, Melaka has been overlooked, and is likely to benefit from the high-speed rail between Kuala Lumpur and Singapore in the future.

Tan feels that the global economy has bottomed and is now on the road to recovery. As China is now the world’s biggest economy after the US, it has a major influence over the other economies around the world, he says.

This article appeared in The Edge Property Pullout, Issue 748 (Oct 3, 2016) of The Edge Singapore.

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