Penrose Facade
Success of Past District 14 Condos Spur Demands at Penrose 5

It’s not just buyers who care about capital appreciation when it comes to Singaporean people who purchase homes. Also home buyers want to be assured that the valuation of their properties will climb to achieve their asset growth targets. Therefore, we expect to see the already strong buyer interest at Penrose showflat when we find proof of benefit for condos in the Aljunied Area, Singapore District 14. Another freehold launch last month, saw good take up take with 70% sold within preview day and 90% sold in less than a month sales. Balance unit only left 4 units of 2 bedrooms and 1 last 4 bedrooms unit.

Let’s first analyze how much the property valuation of the neighborhood has improved over the last few months.

In 2020, the Singaporeans had experienced how they could buy into the area by reselling transactions for the recently concluded 99-year rental condos in Aljunied

In April of this year, Tre Residences, one of the condo located in the Aljunied area, saw its first resale transaction.

On the 9th floor, the transacted unit was a 2-bedroom + research apartment 700 square feet (sq ft). The price was $1,200,000 and this means $1,714 per psf. In March 2017, the seller purchased the unit for $1,003,000 from the developer. The seller made a decent return of $197,000, which amounts to 19.6% in just over three years.

The gain benefit that expect to be able to obtain when new condo projects are built is far higher than 10%, provided they are bought early at the launch stage.

Sims Urban Oasis Facade
Sims Urban Oasis Facade

Sims Urban Oasis is only a little farther removed from Aljunied MRT, but still within convenient walking distance. At the end of 2017, the massive 1,024 unit condo got TOP. Since then, resale sales have been booming, each of which has various amounts of gains from the sale.

One of the most lucrative sales was for the 6th floor double 2-bedroom unit measuring 786 sq ft which sold $1,100,000 (or $1,399 psf) to a 14.9 percent profit last month. The machine is toward the east with a view of the swimming-pool.

Sims Urban Oasis ‘less popular stacks have also racked up its sellers’ profits. An example of this is the Pan Island Expressway (PIE), which sold last months at a profit of 10.1%, in its 10th floor, of 409 square feet. The rates were $645,000, or $1,577 per square foot.

Sims Urban Oasis’ average resale price of units in 2020 has stood at around $1.510.

Penrose, the next condo beside Sims Urban Oasis to come up in Aljunied with a planned late Q3 or early Q4 2020, is located next to Sims Urban Oasis.

Given the high number of interest for Penrose, this development likely to sell well. The Hong Leong Holdings and CDL jointly developed this with a 99 years tenure.

Apart from the recent robust price appraisal record for newer condos in the region as well as a strong profile for developer, the estimated launch price is another concern for homebuyers at Penrose.

For a two-bedroom condo, the price psf could be set at $1,450 to $1,500, down from actual retail costs for the adjacent Sims Urban Oasis.

The starting price of Penrose is anticipated to be very favorable to consumers due to the timing of the acquisition by the manufacturers, after the additional cooling steps in July 2018 had already been introduced.

Faced by less severe international developer competition in government land sales procedure (GLS), Hong Leong and CDL managed to secure a winning offer of $383.5 million for the future Penrose Sites on Sims Drive, which is equivalent to an estimated $1.250 to $1.300 psf breakeven amount.

This allowed the developers to price the project according to their neighbour. So, let us assume that Penrose would bid for buyers outside the entrance.

Therefore, when it begins, Penrose will be one of the cheapest new launch condos in the RCR city fringe area. (New launch projects may be cheaper, but they may not have the same features as Penrose has — like fully fitted condo or an MRT station within walking distance.

Penrose Lap Pool
Success of Past District 14 Condos Spur Demands at Penrose 6

Anyway, what’s hot about District 14 Properties?

The fact that average condo prices for the Rest of central region (RCR) in the last five years have increased by just about fünf per cent (2015 to 2020), relative to other condo regions, also supports the appreciation of the valuation of new condos in Aljunied. RCR condo prices increased by about 10 percent between 2017 and 2020.

In District 14, Aljunied is situated. The average psf condo prices in District 14, taking account of the average prices of newly introduced and newly constructed condominiums, have shown a steady rise over recent years compared to competitive RCR districts with signs of stagnation and dip.

The biggest Paya lebor story, one of the most influential stories on urban growth in this decade, is an explanation for Aljunied ‘s booming condo prices.

Not only would the Paya Lebar (a MRT stop away), but Aljunied itself appears to be ready for transformation, evolve further into a regional commercial and business district after Paya Lebar Quarter (PLQ) has been completed.

Aljunied MRT empty land
Success of Past District 14 Condos Spur Demands at Penrose 7

The empty land next to Aljunied MRT was, firstly, sleeping for decades. for decades. The Urban Regeneration Authority (URA) may possibly see the rationale for a new mall and open the site for tender with ample new residential projects in the city.

Secondly, in lieu of Covid-19, many developments were recently placed on sale either collective sales or through private contracts and expression of interest in the Aljunied area. The first effective en bloc transaction this year was Yun Sing Mansion on the Lorong 13 Geylang in July 2020.

The new on the market is the construction of a freehold clan association over at Lorong 27A Geylang, which could be turned into an boutique apartment. These are both indicators of the government’s strategy for Geylang transformation beginning to have real influence in the country.

Thirdly, Aljunied is in the process of attracting expats. Nexus International School is a huge move in this direction with a huge potential number of 1,200 students, right across from Penrose and Sims Urban Oasis, in this year.

It is an indication that the International School decided to transfer its activities from Holland Road to Aljunied. This also makes a great (though unfortunate) period with the Covid-19 slowdown for expatriates migrating from primary areas to more prosperous places as Aljunied.

And if expats come along to spur up demand, prices for Geylang New Condo will set to rise further.