New developments expected to increase vibrancy in business district - and keep rents up
NIGHTS and weekends in the Central Business District (CBD) are about to get a lot livelier, as the staid office area takes shape as a certified residential district.
Four condominiums are expected to be completed around the Shenton Way area this year and next, adding more than 1,000 homes to the district. Another two have recently been launched for sale, with a third in the pipeline, bringing the total number of condos in the area to 10.
Currently, the only major residential developments in the area are The Sail @ Marina Bay, with more than 1,000 units, and International Plaza and Icon in Tanjong Pagar, with about 850 units in total.
But with the spanking new 428-unit Marina Bay Residences having just received its temporary occupation permit (TOP), more residents will call Shenton Way their home - and as the area becomes more vibrant, rent levels in the district are likely to go up.
At the same time, Jones Lang LaSalle's head of South-east Asia research Chua Yang Liang expects the cost of renting new apartments in the CBD to increase, in line with higher demand across the island as companies hire more expatriates amid the economic recovery.
'The CBD area is likely to benefit as the housing supply remains limited, even with the projects due for completion,' he said. The 168-unit Lumiere is expected to receive its TOP this year, while the 312-unit The Clift and the 321-unit One Shenton are scheduled for completion next year but may obtain their TOPs earlier.
Property agents are already advertising units for rent at Marina Bay Residences at $4,000 to $6,000 a month for a studio, $6,500 to $8,000 for a two-bedroom apartment, and as much as $12,000 for a fully furnished three-bedder.
At The Sail, asking rents range from $3,500 to $5,000 a month for a studio, $4,500 to $6,000 for a two-bedroom apartment, and $6,000 to $9,000 for a three-bedroom unit.
And given that many new CBD developments are high-end projects, they will ride on an anticipated boom in luxury rentals, said DTZ's South-east Asia research head Chua Chor Hoon.
'Rents have firmed and we expect more significant increases for the luxury high-end units in the prime areas, as these are rented by senior management with more generous budgets,' she said.
As more residential projects reach completion in the CBD, the live-in population will make the night scene in the CBD more vibrant, Ms Chua added.
'More retailers and food and beverage outlets will stay open,' she said. 'The increase in amenities available after office hours will in turn attract more people to live in the CBD, so even after office hours, in future it's going to be quite lively.'
Jones Lang LaSalle's Mr Chua added: 'We believe the CBD will gradually loosen up from the current stolid business environment to one that is relaxed, colourful and livelier - similar to Manhattan.'
Residents of The Sail, which was completed two years ago, say they enjoy the convenience of living right in the middle of the city.
'You're within easy reach of financial services if you need them, and there's a good mix of high-end dining and local fare,' said a 34-year-old Singaporean private investor who gave his name as Mr Choo.
Another resident, German Daniel Knapp, 34, likes the fact that his home at The Sail is only three bus stops and six minutes from his office in Suntec City, where he works for a German car manufacturer.
Even The Sail residents who do not work in the CBD, such as American Vorapong Kritsanajootha, find the commute to work more pleasant.
'In the morning, when everybody's coming in (to the CBD), I'm going out. In the evening, when everybody's going out, I'm coming in. So both ways, I'm going against the traffic,' he said.
But the predominance of expat residents in the CBD area means that homes there are heavily dependent on global financial conditions remaining healthy, said Ngee Ann Polytechnic real estate lecturer Nicholas Mak.
'Once there is some financial crisis that reduces the expat population working in the financial industry, rentals of these inner city apartments will be badly affected, maybe more so than those in the suburbs,' he said.
Source: Straits Times, 8 Jun 2010