James Toh, managing director of ACT Holdings, reckons the privately held boutique property development company has been fortunate in selecting the right kind of projects that the market is able to absorb.
ACT Holdings launched two projects last month: Charlton 27 and Cambio Suites. Both developments are off Upper Serangoon Road in District 19. Charlton 27 is a strata-titled terraced housing development located on Charlton Road, while Cambio Suites is a 53-unit boutique condominium block on Lim Tua Tow Road in the Kovan and Yio Chu Kang neighbourhood.
To date, Charlton 27 has seen 13 of its 27 terraced houses sold, at process ranging from $3.48 million to $3.66 million, or unit prices of $615 to $738 psf, according to caveats lodged with URA Realis as at end-June. The five-bedroom houses have five levels, including a basement and attic, and come with a home lift and basement parking for two cars. The built-up areas of the houses are 3, 983 to 5, 188 sq. Ft.
Cambio Suites comprises primarily compact two and three bedroom apartments. Two-bedroom apartments start from 47sq m(506 sq ft), which is just slightly larger than a typical HDB two-room flat of 45 sq m, while two-bedroom-plus-study units are 592 to 689 sq. Ft. Three-bedroom apartments are between 796.5 and 947 sq. Ft.
“This is now par for the course among boutique developers-two-bedroom units of 500 to 600 sq ft and three-bedroom units of 700 to 900 sq ft, “Says Alan Cheong, head of research at Savills Singapore.” Mainstream developers are generally more conservative. However, to keep absolute prices affordable, there are now more compact two-bedroom apartments of 732 sq ft and three-bedroom units of 800 to 900 sq ft in projects launched by mainstream developers.”
Last month saw 36 of the 53 units at the freehold Cambio Suites snapped up at a median transaction price of $1, 430 psf. The project was launched on the weekend of May 31 and June 1 Prices ranged from $809, 600 for a 506 sq ft unit to $1.8 million for a three bedroom penthouse of 1, 539 sq ft. “ These smaller two- and three- bedroom units appeal to young families as well as investors who want to rent them out, ” says ACT’s Toh.
In fact, small one-bedroom apartments of 400 to 500 sq ft have been able to fetch rents to $2, 500 to $2, 600 a month, which works out to a yield of 5% estimates Savill’s Cheong.” That has worked very well for the shoebox apartment investors, especially those in the East Coast, Kembangan and Telok Kurau areas, as most expatriates today are singles or couples who don’t mind shoebox apartments on the city fringe, as long as they are near a transport hub and amenities.”
Cambio Suites is a joint-venture development between ACT Group, Nobel Design and Pinnacle Assets Group. This is the second joint-venture project by the partners. Last year, they launched Casa Cambio across the road. At the first weekend preview, 193 of the 198 units were snapped up at an average price of above $1, 300 psf. The development was sold out in less than three weeks, recounts Toh.
Likewise, Charlton 27’s launch is on the back of the success of Charlton Residences, launched in late 2011, when 80% of the project was sold during the preview stage. Charlton Residences is also free hold strata-titled terraced housing development with 21 units, and is a joint-venture project with SingHaiyi Group (formerly known as SingXpress Land) holding an 80% stake and ACT, the remaining 20%. The three-storey houses at Charlton Residences have built-up areas of between 5, 350 and 7696 sq ft, six bedrooms and two basement parking spaces each. Average prices of units were $2.8 million, or around $500 psf.
“So, we have two sites on Charlton Road and two sites on Lim Tua Tow Road, ” says Toh. “ They cater to the two ends of the suburban market – landed homes for owner-occupiers, usually extended families with children who want to live together, and small two- and three-bedroom apartments for young families.”
Prior to 2009, ACT Holdings had focused mainly on the prime districts of 10 and 11, as well as Sentosa Cove, where it developed many landed housing projects, These include cluster housing developments such as the 59-unit Watten Residences; Shelford Terraces, a terraced housing project and Dunsfold Residences, a six unit strata-titled bungalow development.
ACT Holding was also an early bird in the upscale waterfront residential resort of Sentosa Cove. It developed a row of terraced houses called Villas at Sentosa Cove and four bungalows.
However, after the market recovered from the global financial crisis in 2010, “we felt that the suburban and city fringe markets were more robust and buyers’ demand more genuine, ” says Toh. ACT switched its development strategy, concentrating on the city fringe in recent years. And since 2010, all the company’s developments have been clustered on two stretches off Upper Serangoon Road, namely, the Kovan area and that near the Serangoon MRT station and nex shopping mall, Toh adds.
“This area has rejuvenated because of the MRT line and the easy access with the flyovers and expressways, ” says Tan Lam Peng, director of ACT. “It has a lot of historical charm as well, with the old shophouses on Lim Tua Tow Road. The mature HDB estates in the vicinity provide a big base of upgraders who want to buy private properties.”
Showflat sales have been slow following the Monetary Authority of Singapore’s latest measures, says Toh. “Homebuyers are trying to work out what they can afford.” However, he believes there are still cash-rich buyers in the market, as seen from the recent sales at Charlton 27. He adds that the landed housing market is still relatively resilient.
Toh feels that the government should remove the 15% additional buyer’s stamp duty (ABSD) imposed on foreigners in January and the seller’s stamp duty (SSD) of 16% to 4% levied on buyers who sell their property within the first to fourth years of their purchase. The SSD was introduced in January 2011.
“The ABSD and TDSR [Total debt servicing ratio] are sufficient to deter speculation if the aim is to prevent the average Singaporean from borrowing too much to purchase an investment property, ” argues Toh. “But they are crippling an already-moribund high-end condo market in which most of the foreign purchasers pay mainly in cash and take on very little debt.”
Charlton 27, ACT Holding's latest strata landed housing project, comprises 27 terraced houses.
This Article is from THE EDGE SINGAPORE ( July 22, 2013 ) section CC5.