Singapore-listed conglomerate Straits Trading Co quietly released 10 units at its Gallop Green project for sale last month. The 53-unit, low-rise development on Wollerton Park, off Holland Road, comprises a mix of 13 townhouses and 40 apartments. Since completion of the freehold Gallop Green in 2002, all units had been held by the developer for investment and were fully leased.
The apartments are large four bedroom units and measure from just under 3,000 sq ft to 4,032 sq ft. Meanwhile, the townhouses are also sizeable, ranging from 4,075 to 4,952 sq ft.
All the 10 apartments that were released for sale were snapped up within four days at an ave rage price of $1,400 psf, says Eric Teng, executive vice-president (property) at Straits Trading. The units were sold via three marketing agents: DTZ, Knight Frank and Savills, and all the buyers were said to be Singaporeans and permanent residents. According to caveats lodged from July 17 to 24, units sold at Gallop Green ranged from $4.19 million for a 2,992 sq ft apartment to $4.52 million for a 3,229 sq ft apartment.
Marketing agents say the asking rent for a 3,013 sq ft four-bedroom apartment at Gallop Green is about $13,000 a month, or a rental yield of 3.7% to 5% a year, which is still considered more attractive than today’s bank deposit rates of 0.25% to 0.5%.
Over at the 140-unit, freehold Gallop Gables located on Farrer Road, which was also developed by Straits Trading and completed in 1997, the developer had sold some units but held back two blocks of apartments, or 38 units, for investment. Its subsidiary also held some units. In July last year, it had tried to put up the units for an en bloc purchase at an average of $1,500 psf by expressions of interest, but failed to find a buyer.
In March this year, 10 units were released for sale with a twoyear rental guarantee of 7% a year and they were snapped up within three days. Subsequent units were sold without the rental guarantee; yet, a total of 40 units was sold within six weeks at $1,118 to $1,300 psf, says Teng.
Investors were mainly attracted to the attractive pricing, the quality of the project, which is well maintained, and the large unit sizes. Most recently, a 2,500 sq ft apartment at Gallop Gables was leased at $11,500 a month.
The most recent transaction at Gallop Gables was in July, when a 1,733 sq ft apartment was sold for $2.39 million, or $1,380 psf. Two remaining units are still available for sale with an indicative price of $1,500 psf. In June, a 2,971 sq ft apartment changed hands in the resale market at $4.3 million, or $1,447 psf. At this level, prices of the 12-year-old condominium development are pretty much back to the peak prices seen in 2H2007.
“After the successful sale of the units at Gallop Gables, we had a lot of inquiries about Gallop Green. And, with the improved market sentiment, we decided to test the market with 10 units at $1,400 psf each,” says Teng. He does not expect to release any more units at Gallop Green for sale unless he sees “an arbitrage opportunity”, because the developer is enjoying a rental yield of 5% a year, based on the units that it is still holding on to.
Source: The Edge, 17 Aug 2009
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