Regency Park may be 19 years old, but the 292-unit condominium has recently been on the radar of property investors. On Nov 20, three caveats were lodged for its units, with average prices ranging from $1,584 to $1,727 psf.
Alexz Wan, an associate with Propmax Real Estate and a property marketing agent who specialises in the project, says investors are betting that new launches in the neighbourhood will be priced higher. In the prestigious Nathan Road enclave, TID Pte Ltd (a joint venture between Hong Leong Holdings and Mitsui Fudosan) is likely to launch a 65-unit development next year, and Kajima Overseas Asia has an empty plot in the neighbouring Bishopswalk, which has yet to be launched. Regency Park is easily the largest development there, sitting on a sprawling freehold 500,000 sq ft site on Nathan Road, and is accessible via Grange and River Valley Roads.
In the River Valley Road neighbourhood, CapitaLand’s 127-unit Latitude (formerly Drag- on View Mansion) on Jalan Mutiara, was relaunched in July, and units have been sold at $1,662 to $1,930 psf. The most recent caveats in the development were in October, when two 1,615 sq ft units were sold for $2.781 million ($1,722 psf) and $2.965 million ($1,836 psf) respectively.
The attraction of Regency Park is the size of the units, with three-bedrooms ranging from 2,228 to 3,283 sq ft; four-bedrooms from 3,455 to 3,649 sq ft; and penthouses at 6,049 to 6,415 sq ft. The units are sought after by Caucasian expatriates because of their spaciousness and large balconies, says Wan.
Depending on layout, unit size, condition of the apartment and views, monthly rental rates are $11,000 to $12,000 for some of the three-bedroom apartments, and $14,000 to $16,000 for four-bedroom apartments, says Wan. “Most of the owners in the project are professional investors,” he adds. “They really take care of their apartments.”
Wan is marketing three units in the project, ranging from a 3,175 sq ft three-bedroom apartment going for $5.18 million ($1,631.50 psf) to a four-bedroom 3,649 sq ft unit priced at $6.5 million ($1,781 psf). Most of the potential buyers are looking at cash flow and capital-upside potential, says Wan.
Knight Frank associate Benny Yeo is marketing a 2,269 sq ft apartment at Regency Park with an indicative price of $4 million. The unit is currently tenanted at a monthly rental rate of $9,200, with at least another year outstanding in the lease, says Yeo. “A lot of Indonesians are investors in this property, and a lot of the interested parties in the project today are also Indonesians,” he says, adding that the main attraction are the large unit sizes and the ease of renting the units out, with very short vacancy periods between leases.
Regency Park was developed by Allgreen Properties almost two decades ago and positioned as a high-end condo with only large units starting from the three-bedroom apartments. Most recently, a sixth-floor 3,649 sq ft four-bedroom apartment was sold for $6.3 million, or $1,727 psf, according to a Nov 20 caveat lodged with URA Realis. That was the third time the apartment had changed hands in the last 13 years. There could have been more transactions, but URA Realis database records go back only to January 1995.
The last time the four-bedroom unit changed hands was in May 2007 for $6.2 million, or $1,699 psf. The previous owner had purchased the property in a resale at $3.825 million, or $1,048 psf, in March 1996, an appreciation of 62% in slightly over a decade.
The other unit at Regency Park that changed hands in the resale market recently was a second floor 2,260 sq ft, three-bedroom apartment sold for $3.58 million, or $1,584 psf, in November. The last time the unit changed hands was in November 2006, when it was sold for $2.68 million, or $1,186 psf — a 33% capital gain in the last three years. The unit last changed hands in September 1999 for $2.18 million, or $964 psf.
The transaction prices of Regency Park apartments have made quite a comeback since the start of the year. When the market was looking rather bleak in the first four months, units were changing hands at $1,001 to $1,178 psf. Transaction prices picked up in August, when apartments changed hands at $1,494 to $1,603 psf.
Farther down Nathan Road is the 91-unit boutique development, Nathan Residences, by niche developer Tat Aik Property. It was launched in June at $1,200 to $1,300 psf. In the most recent new sale at Nathan Residences, a 786 sq ft two-bedroom apartment on the fourth floor was sold for $974,850, or $1,241 psf. The highest transacted price for the new project, scheduled for completion in 2012, was for another two-bedroom apartment of a similar size on the 11th floor, sold for $1.13 million, or $1,450 psf, in September. “[Nathan Residences] is a different kind of product and appeals to a different audience. It’s a boutique development with mainly one and two bedroom apartments,” notes Wan.
In the meantime, it looks like foreign investors are gravitating towards the large three and four bedroom apartments at Regency Park, and paying a premium for space.
Source: The Edge, 21 Dec 2009