Special Feature

The Interlace reloaded

October 20, 2014 1:45 PM SGT

SINGAPORE: To raise the game, CapitaLand Singapore has launched 30 units with furnishing package.

Will such an innovative scheme draw buyers who have otherwise been focused on bargains? CapitaLand has created a stir in the market by rolling out its “Designer Series”, showcasing 30 fully furnished units at The Interlace with interior design packages worth $100,000 to $180,000 per unit.

It is a clear departure from the recent trend of aggressive price discounts and rebates by developers and funds looking to clear unsold units.

“We believe we are one of the first developers in Singapore to fully furnish 30 units for sale,” says Wong Heang Fine, CEO of CapitaLand Singapore (Residential) in an email response.

“We’ve always tried to create value through product differentiation.

We pride ourselves in being innovative, and setting new trends in the Singapore residential market.” The packaging of units with furnishing is not new, but the number of units in this case is certainly unmatched, says Donald Han, managing director of Chesterton Singapore.

“CapitaLand has the luxury and wherewithal of extending a furnishing package to new buyers on a massive scale, which other developers may not have the financial muscle or ability to do so,” he admits.

Nevertheless, the move will “set the tone for the market”, adds Han, and is something that other developers could emulate in terms of thinking out of the box and creative strategies beyond discounting.

Some developers and funds have successfully cleared their unsold stock by offering straight discounts.

For example, Bukit Sembawang offered a 9% to 12% rebate for the remaining 37 units at the The Vermont on Cairnhill.

All the units were snapped up in just over a fortnight in July at a median price of $2,113 psf, according to URA figures.

Meanwhile, ARA Asset Management’s Asia Dragon Fund sold the 12 remaining units at Grange Infinite to Indonesian tycoon Tahir, at an average price of $2,050 psf, after a 20% bulk discount.

Both projects are freehold and located in prime district 9.

Differentiating itself

The fully furnished units at The Interlace will certainly differentiate the project from the rest, say property consultants.

While it is designed to attract buyers, it is not expected to translate into a quick sell-out.

“It’s a smart way of offering value to buyers without eroding the overall price psf of the project,” says Samuel Eyo, director of Savills Prestige Homes.

For CapitaLand, The Interlace was never meant to be a run of the mill project.

A redevelopment of the former Gillman Heights condo in Telok Blangah in a joint venture with Hotel Properties Ltd, The Interlace sits on a sprawling 8.1ha site (871,884 sq ft).

The 31 six-storey blocks hexagonally stacked was an acrobatic design feat by star architect OMA/ Ole Scheeren, and unlike any other in Singapore.

When the design was unveiled in September 2009, it had provoked heated debate, with feng shui masters weighing in.

Five years on, it is a landmark for drivers along Alexandra Road and the Ayer Rajah Expressway, and continues to have its fair share of admirers and detractors with equally polarised views ranging from “monumental” to “monstrosity”.

Whatever the reaction, the award-winning project stands out in Telok Blangah, a quiet leafy city fringe neighbourhood with pockets of ageing HDB blocks, the Telok Blangah industrial estate and the commercial buildings along Alexandra Road.

When the 1,040-unit project was completed in September 2013, CapitaLand threw a large-scale “completion party” attended by 1,500 residents along with their friends and family.

This was instrumental in fostering a sense of community, according to the developer.

After all, the centrepiece of The Interlace is the eight large-scale hexagonal courtyards.

To enhance the aesthetics of the open spaces, and help new residents get their bearing eye-catching sculptures are strategically placed in each courtyard.

There are water features such as a lotus pond, swimming pool and children’s play pool, shaded lounge areas, recreation rooms such as billiards room, games room and reading room as well as private theatres.

“I like the ‘village concept’ which encourages interaction between residents, and the way green spaces have been integrated into the built-up areas,” says Terence Tam, Hong Kongbased director and chief designer of Union-tech Services (UTS), who designed a series of showflats for The Interlace when the project was first launched and for D’Leedon at Farrer Road, another CapitaLand-led project, designed by Pritzker Prize winner Zaha Hadid.

Designer Series offering

Tam’s UTS is one of the five interior designers showcased as part of CapitaLand’s Designer Series at The Interlace.

The others include Singapore’s I.D.

Dept, Cynosure and Su Misura, as well as Italian interior design and furniture company Saporiti Italia.

The smallest units at The Interlace are the two-bedroom units which are sized from 807 to 1,604 sq ft.

These are already sold out.

The available units at The Interlace are mainly the three-bedroom-plus-family units, four-bedroom units and multi-generational, or 3G units.

The furnished units are therefore designed to give homebuyers an idea of how to creatively maximise the indoor and outdoor spaces of these units.

“The Designer Series at The Interlace is likely to appeal to those looking for the luxury of larger units that are ready furnished and in move-in condition,” says Tan Tee Khoon, Knight Frank’s executive director of residential services.

“Besides the charm of the city fringe location, the price psf for most units are in the region of $1,250 to $1,3000 psf, and thus, a definite value proposition.” Knight Frank and ERA are joint marketing agents for The Interlace.

Interior design is very subjective, adds Eugene Lim, Knight Frank’s head of residential project marketing.

“That’s why the developer is offering 30 different designs, six different themes from five established interior design firms, both local and overseas,” he points out.

Prices of the furnished units in CapitaLand’s Designer Series at The Interlace are said to range from $2.56 million for a 1,873 sq ft three-bedroom- plus-family unit to $4.66 million for a 5,608 sq ft four-bedroom unit with a roof terrace.

Lim reckons these furnished units would also be attractive to investors.

Those who wish to furnish the units themselves will have to spend additional time and money.

And this will mean foregone rental income during the period of renovation and furnishing, says Knight Frank’s Lim.

By buying fully furnished units, investors will be able to lease them out immediately, and also see a rental premium of 20% to 25% relative to unfurnished or partially furnished units, he estimates.

For instance, one of the furnished units is a three-bedroom+family unit on the 12th floor of one of the blocks that comes with a private roof garden and total floor area of 4,478 sq ft.

The unit was furnished and designed by UTS’s Tam.

According to him, the site survey and design drawings took a month to complete, followed by workshop production and on-site work taking up another four months.

The show unit by UTS includes a water feature at the spiral staircase, a textured glass partition to separate the living/dining area from the family/study area, and a raised deck at the rooftop terrace to enjoy the views.

If a homebuyer were to replicate the design on his/her own, it could take anywhere from five to six months, and cost around $500,000, estimates Tam, much more than the package said to be worth $100,000 to $180,000.

Even the art pieces were curated to fit the character of the unit, he adds.

Meanwhile, owners would need to spend anywhere from $200,000 to $400,000 to recreate one of the six show units designed by Su Misura, says its creative director, Angela Lim.

Likewise, those who want to replicate the classic European style featured in the units designed by Saporiti Italia will be looking at a budget of $350,000 to $450,000, reckons Emily Lim, the company’s managing director in Singapore.

Asking rents for unfurnished four-bedroom units at The Interlace, such as a 4,252 sq ft unit was listed recently in propertyguru.com.sg at $9,500 a month.

Unfurnished or partially furnished three-bedroom units at The Interlace have rental rates ranging from $6,500 to $7,500, depending on the size.

Meanwhile, two-bedroom units have been rented out at just under $4,000, says Jacqueline Wong, Savills’ senior director of residential leasing and ad hoc sales.

“Most expatriates with families looking for large three- and four-bedroom units tend to have their own furniture, so they prefer partially furnished units.”

The furnished units are therefore more likely to appeal to owner occupiers rather than investors looking to rent them out, she adds.

No price war

Property consultants see CapitaLand’s move as a way to make a statement without engaging in a price war.

“Offering price discounts may not be the solution for some of the luxury condos or landmark developments by well-known architects as this may downgrade the image,” concedes Chesterton’s Han.

The Interlace was first launched in September 2009, where the units were initially sold at prices from $850 to $1,150 psf, or an average of $1,000 psf.

Prices hit a high of $1,610 psf in a sub-sale last October.

To date, 861 units (83% of the units) in the 99- year leasehold private condo development have been sold, leaving just 179 units available.

The latest transaction was for a 1,873 sq ft three-bedroom unit sold by the developer for $2.55 million ($1,364 psf), according to a caveat lodged in late-August.

Two other landmark projects helmed by CapitaLand will be completed by end-2014.

One is the 1,715-unit D’Leedon at Farrer Road, a redevelopment of the former Farrer Court condo.

D’Leedon has 255 unsold units as at end-August, with the latest median price at $1,827 psf, according to URA data.

The other is The Nassim, a 55-unit low-rise luxury condo on the site of the former ANA Hotel at the prestigious Nassim Hill.

The project has yet to be launched.

CapitaLand continues to sell units at its other existing launches.

In Bishan, the 509-unit Sky Habitat designed by Moshe Safdie has just 181 unsold units as at end-August.

It was one of the top-selling projects last month, with 20 units sold at a median price of $1,354 psf.

Meanwhile, the 694- unit Sky Vue has 190 unsold units, with the latest median price at $1,311 psf as at end-August.

Meanwhile, the freehold 124-unit Marine Blue condo in Marine Parade is said to be “launch-ready”.

“Depending on the market conditions, we will launch the project at a suitable time,” says CapitaLand’s Wong.

Future launches include a 268- unit development at Cairnhill, which will be a redevelopment of its former serviced apartment project, Somerset Grand Cairnhill; and a 109-unit landed housing development on a site purchased by CapitaLand in a government land tender last June.

According to CapitaLand’s Wong, the developer will continue its strategy of building well-designed homes with varying sizes and layouts to cater to housing aspirations of different market segments.

“As the impact of the total debt servicing ratio and concerns over interest rate hikes continue to weigh on the market, private residential demand and pricing are expected to moderate further in 2H2014,” he adds.

Meanwhile, all eyes will be on The Interlace, the game changer in the residential market.

This article appeared in the City & Country section of Issue 644 (Sept 22) of The Edge Singapore.

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