More homes in Downtown Core after the partial redevelopment of Marina Square
By Elizabeth Choong
/ EdgeProp Singapore |
Marina Square is in the heart of the Downtown Core Planning Area (Source: EdgeProp LandLens)
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SINGAPORE (EDGEPROP) - It was recently announced that Singapore Land Group received provisional permission from URA to rezone Marina Square. Singapore Land Group, together with its parent company UOL Group, has a majority stake in the mixed-use development. The application is to rezone a part of the site from “hotel” to “residential with commercial at the first storey” and to remove the gross plot ratio for two land parcels along Raffles Boulevard.
Overview of the neighbourhood
Marina Square is a 99-year leasehold development that has 56 years left on its tenure and was completed in the late 1980s. The mixed-use development has a total gross floor area of about 3.4 million sq ft and comprises three hotels (790-room Pan Pacific Singapore, 583-room Parkroyal Collection Marina Bay, and 510-room Mandarin Oriental) as well as a five-storey mall.
Notable developments in the vicinity include Suntec City, Bugis Junction, Duo Singapore, South Beach, Esplanade, Raffles Hotel, Raffles City, Gardens by the Bay, and the upcoming Guoco Midtown.
Marina Square is extremely well-connected with four MRT stations (Promenade, Esplanade, City Hall, and Bugis) within a 1km radius. Furthermore, Promenade (Circle and Downtown Lines), City Hall (East-West and North-South Lines), and Bugis (East-West and Downtown Lines) are dual-line stations, while Esplanade MRT Station (Circle Line) is only one stop away from Promenade MRT Station.
The easy access to the MRT network means that Marina Square is only one stop away from the CBD and three stops away from Orchard Road via City Hall MRT Station. Additionally, Marina Square is a short drive away from Nicoll Highway, East Coast Parkway, and Rochor Flyover.
Source: EdgeProp LandLens
Potential new residential development
The mall at Marina Square faces fierce competition from the revamped malls in Orchard Road and malls surrounding Marina Square, which includes Suntec City, Bugis Junction, Bugis+, South Beach Avenue, Duo Galleria, Raffles City, and the upcoming Guoco Midtown. Additionally, some shoppers favour suburban malls due to their convenient location near their home. As such, the partial redevelopment of Marina Square is expected to inject more vibrancy and kickstart a rejuvenation of the neighbourhood.
The potential partial redevelopment is expected to include new residential units, in line with a number of nearby mixed-use developments with residential and commercial components.
The current stock of condo units in the neighbourhood is limited, so new residential units from the partial redevelopment of Marina Square is likely to capture the housing demand for the area. Furthermore, there is only one condo within a 500m radius of Marina Square, namely South Beach Residences. Notable completed condos within a 1km radius include Eden Residences Capitol, Duo Residences, and The M. The uncompleted Midtown Modern and Midtown Bay are also within a 1km radius.
Source: EdgeProp LandLens (as at 2 November 2023)
Expected to be in hot demand
The residential units from the potential partial redevelopment of Marina Square are expected to attract much demand based on the strong sales performance of nearby condos that were launched in recent years. Midtown Modern, Midtown Bay, and The M are located within a 1km radius of Marina Square and were launched for sale during the past five years.
The M is a 99-year leasehold condo that was launched in February 2020. During its launch weekend, a take-up rate of 70% was achieved. As of November, the 522-unit development was almost fully sold. The M also obtained temporary occupation permit (TOP) in September.
Midtown Bay and Midtown Modern are part of Guoco Midtown, which is a mixed-use development that will have residential, retail, and office components when completed. Midtown Bay was launched in October 2019 and achieved a cumulative take-up rate of 56.6% by November this year. Midtown Modern was launched later in March 2021 but has since achieved a higher cumulative take-up of 95.7%. Additionally, 61% of the units in Midtown Modern were sold during its launch weekend. Midtown Modern is a larger development with 558 units, while Midtown Bay has only 219 units. Both condos are 99-year leasehold developments that are still under construction.
All three developments have seen robust price growth since its launch, indicating strong demand for housing in the area, which is a short drive away from the CBD and Orchard Road. Additionally, Midtown Bay and Midtown Modern are located beside Bugis MRT Station, while The M is a short walk away from the same station.
Source: EdgeProp Market Trends (as at 1 November 2023)
Price growth on the cards
Most of the condos that are not recently launched and located within a 1km radius of Marina Square tend to be older and smaller developments with fewer than 100 units, making them unsuitable as comparables for the potential residential development in Marina Square. Duo Residences and South Beach Residences are the only exceptions. Duo Residences has 660 units and obtained TOP in 2017 while South Beach Residences has 190 units and obtained TOP in 2016. Both condos are also 99-year leasehold developments in District 7 and the Downtown Core Planning Area.
Both condos are part of integrated developments with residential, office, and retail uses, and South Beach has an additional hotel component. Furthermore, South Beach Residences and Duo Residences are directly connected to Esplanade and Bugis MRT Stations, respectively.
Since 2019, South Beach Residences and Duo Residences have achieved price growths of 34% and 3%, resulting in current average resale prices of $4,504 psf and $2,242 psf, respectively. In comparison, the average resale price for 99-year leasehold condos in Singapore grew 22% to $1,520 psf over the same timeframe.
Source: EdgeProp Market Trends (as at 1 November 2023)
Higher ABSD a potential drawback?
In April, the Additional Buyer’s Stamp Duty (ABSD) rate doubled from 30% to 60% for foreign buyers. The surge in the ABSD rate dampened some demand from foreign buyers. Last year, foreign buyers accounted for 7.3% of all sale transactions for new condo units in Singapore but declined to 5.6% for the first 10 months of this year.
New condos in the Core Central Region (CCR) held much appeal for foreign buyers who snapped up 12.0% to 34.6% of the units sold from 2018 to 2020. Despite the increase in the ABSD rate, foreign buyers accounted for 15.3% of the new CCR condo units sold during the first 10 months of this year, up from 14.5% last year. However, a closer examination of the data indicates that foreign buyers only purchased 189 new CCR condo units from January to October, significantly fewer than the 268 units transacted last year.
A deep dive into data for the Downtown Core Planning Area indicates that foreign buyers purchased 27 and 28 new condo units in the planning area in 2021 and 2022, respectively. The number of units sold in the first 10 months of this year inched down to 25 transactions. The negligible decrease is a good indication of the continued popularity of new condos in the Downtown Core Planning Area among foreign buyers despite the hike in ABSD rate.
Future developments in nearby Marina South could pose competition
The Downtown Core and Marina South Planning Areas are located next to each other. URA had announced plans to transform Marina South into a green and blue sustainable oasis. Marina South is also planned to be a community-centric precinct where necessary daily amenities will be a short 10-minute walk away for residents.
To kickstart the development of the Marina South precinct, URA launched the tender for two sites under the government land sales (GLS) programme. Both GLS sites have tenures of 99 years and are located next to each other. They are also a short walk away from Marina South MRT Station.
Source: EdgeProp LandLens (as at 31 October 2023)
The tender for the GLS site at Marina Gardens Lane was awarded in July to a consortium led by Kingsford Group. The future development is expected to have about 790 residential units and retail outlets.
The second site is located along Marina Gardens Crescent. The tender for the site will close in January next year. The GLS site is a white site that allows the development of about 775 residential units and commercial components.
The future development on these two GLS sites might pose competition to the potential condo on the Marina Square site, especially if they are launched around the same time. Their proximity to each other as well as similar characteristics of being leasehold condos in a central location and being part of a mixed-use development means that buyers can be expected to make comparisons before signing on the dotted line.
Check out the latest listings for South Beach Residences, Duo Residences, Midtown Bay, Midtown Modern, The M properties
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