UOL, Kheng Leong to sell first phase of Alexandra condo at over S$1,600 psf

Singapore

CITING upside potential in new condominium project Principal Garden that may defy tepid market conditions, developers UOL Group and Kheng Leong Company said that they are contemplating the launch of its 663 units in phases.

Starting with some 250 units in phase one, these units could be priced at over S$1,600 per square foot (psf) on average, said UOL deputy group CEO Liam Wee Sin.

The units start from S$770,000 for a one-bedder, S$1.18 million for a two-bedder and S$1.7 million for a three-bedroom unit.

Besides pricing, the mix of units is another critical factor given that unsold inventory of nearby projects comprises the larger units, Mr Liam said. Over 70 per cent of units at Principal Garden are one and two-bedroom units ranging from 484 sq ft to 807 sq ft, mainly targeting investors given its proximity to the city centre.

Located on the fringe of a good class bungalow area, Principal Garden will also have an extensive greenery landscape. Its greenery to built-up space ratio of 80:20 is touted as "exceptional" given that developers tend to maximise built-up space for newer condominium projects.

"We secured the site last year at a reasonable bid price... we are now able to pass on value and savings to buyers and thereby able to achieve an attractive price for the units," Mr Liam told reporters. "We believe buyers can see the strong upside potential."

UOL and Kheng Leong, the investment vehicle of Wee Cho Yaw's family, had in April 2014 won the 99-year leasehold site for S$463 million or S$821 psf per plot ratio (psf ppr) in a 70-30 partnership.

Consultants have noticed that the land cost already gives them pricing advantage over the adjacent plot at Prince Charles Crescent acquired by a Wing Tai-led consortium for S$960 psf ppr in September 2012.

The Crest, being developed by the Wing Tai-led consortium, has a median selling price of S$1,694 psf this year and an unsold inventory of close to 390 units.

There are also close to 190 and 350 unsold units at Alex Residences in Redhill and Highline Residences in Tiong Bahru, where the median selling price for units sold this year was S$1,720 psf and S$1,857 psf respectively, according to data on URA Realis.

PropNex chief executive Mohamed Ismail, who is marketing Principal Garden, said: "Chances are the next round of buyers will not be able to get the same price because it is, at the entry level, very much discounted to the surrounding area product."

Mr Mohd Ismail is expecting rental yields in excess of 4 per cent especially for the smaller units - a level he deems a potential hedge against looming interest rate hikes. The other marketing agents for Principal Garden are Huttons and CBRE.

Asked if he is concerned about new supply from the government land site at Alexandra View next to Redhill MRT released for sale last month, Mr Liam said that the site's tender conditions are expected to result in a "a different product" with larger residential units. He also noted that the city fringe area defined as the Rest of Central Region (RCR) has been more resilient in past quarters, with UOL's other project Botanique at Bartley in the RCR being 67 per cent sold since its launch in April.

SLP International executive director Nicholas Mak said he expects good take-up for Principal Garden given its pricing and extensive coverage of the marketing agencies involved, adding that it makes sense for the developers to keep some desirable units in reserve by launching in batches.

But one other consultant, who declined to be named, viewed the phased launch as a reflection of weak sentiment.

Principal Garden is right next to the Alexandra Park Connector that extends towards the Singapore River and the Central Business District. Its four 24-storey blocks are elevated to offer better views. The amenities include the wine cellar and lounge, shared bicycle facility, a 2,018 sq ft gym, sky club on the 24th floor, and mineral pools.

There are 65 dual-key units that come in two-bedders (861 sq ft) or three bedders (1,195 sq ft). Besides the typical one to three-bedroom units of 484-1,195 sq ft, there are 66 larger three- to five-bedroom units of 1,238-2,347 sq ft with private lifts.

The showflat for Principal Garden will be open to the public from Oct 17 for two weeks before balloting begins.