top of page

Investment Analysis of Upcoming Major Project Launches (Oct 2023)

Updated: Oct 19


Investment Analysis of Upcoming Major Project Launches (Oct 2023)

October 2023 is a busy month for new projects launching before everyone goes away for their holidays from mid November onwards.


It sounds like, anecdotally, that everyone is headed to Japan! And that's awesome as it's also one of our favourite places to visit - checking our list of cuisine, culture, architecture, nature, snowboarding and what the missus loves most... shopping!


And so, yes we are headed to Hokkaido too for a month+ this time round to enjoy winter as much as we can before school re-opens.


So much for wanderlust, let's examine the upcoming 4 major launches - Hillock Green, J'den, The Arcady at Boon Keng and Watten House and what I think about them.

 

1st up Hillock Green


hillock green overview details tenure developer

Hillock Green is the 3rd parcel to be launched in the Lentor growth hotspot after Lentor Modern and Lentor Hills Residences.


Hillock Green Replacement Cost Analysis

hillock green replacement cost breakeven analysis price discounts

The estimated breakeven price for the developer is at $1963psf and we can naturally expect sensitive pricing as it comes on the back of the 2 recent launches in the neighbourhood with another 3 coming up.


Being surrounded by the 5 plots developed by a high quality competitor (GuocoLand/Hong Leong Group), it is likely that Yanlord and partners will price very sensitively for its initial launch so as to clear a reasonable volume of units for a safer hedge against competing supply.


Yanlord and partners have not indicated their estimated launch prices to the media but analysts are projecting a starting price of $1938psf.


Closest Project Comparisons to Hillock Green

hillock green price comparisons to other projects

However, with pricing at Lentor Hills Residences starting from $1834psf and averaging $2101psf, we expect Yanlord to price closer to $1800psf and average $2050psf so as to achieve higher sell-through rates for a good launch result.


In later phases, average prices should creep up to $2100-2150psf giving them a very slim estimated 10% profit margin.


In Summary


In our opinion, Hillock Green faces significant supply competition and the developer will be under pressure to sell at very attractive prices to avoid too much head-on competition with strong competing products in its surroundings.


If buyers manage to get good facing units with good layouts in the sub-$2000psf zone, it will provide a good margin of safety for the long run as price acceptance should remain above the $2100psf benchmark.


That said, investors in Lentor have to be ready to hold for the mid-long term (Est. 7-10 years) for significant gains as buyers will be spoilt for choice for awhile.

hillock green summary and analysis for investment

 

Next up is J'den, the highly anticipated new launch in Jurong Lake District.

j'den summary and analysis for investment

As J’den is converted from a commercial mall to a mixed commercial residential site, it’s breakeven cost estimates are not available.


However judging from the recent breakeven estimates at Lakeside of ~$1950psf, we can expect breakeven estimates to be around $23-2400psf for J’den’s premium location if it were to be launched as a GLS.

j'den replacement cost breakeven analysis price discounts

J'den Pricing


CapitaLand has yet to release its price guide.


In our opinion, with the lack of new launches in the Jurong East neighbourhood since Lake Grande launched in 2016, the impending wave of interest from Jurong Lake District’s transformation plans and that J’den is an integrated development, CapitaLand is not likely to launch any lower than $2500psf.


It could in fact be in their interest to bide for time and sell out J’den in slow and steady fashion over the next few years.


A launch price of below $2400psf will be a very attractive entry price point if investors are lucky.


J'Den Closest Project Comparison

j'den price comparisons to other projects

The only close comparison to J’den is J Gateway which has 88 years lease left.


If we were to pro-rate the remaining lease of J Gateway back to 99 years, the current average selling price will be $2088psf.


J’den being a brand new mixed development with a fresh lease would normally command at least 25% more in price, which works out to an estimated $2609psf average price.


This is even before we factor in developers’ reduced floor area yields from URA’s recent harmonization plans which can potentially drive their selling prices up by another 7-10%.


In Summary


In our opinion, J’den is a highly attractive project as it is the first of several upcoming new projects at the centre of JLD, a major growth hotspot with lots of steam left.


In addition, it’s integrated nature means that there will be unparalleled convenience for owner occupiers with amenities just a lift ride away.


It’s proximity to MRT, malls and amenities are also second to none in the neighbourhood.


If investors are fortunate enough to have a bite of this investment grade project at below $2400psf, it will almost certainly reward them in the years to come with great gains and rental returns.

j'den summary and analysis for investment

 

Next up, Watten House - Highly sought after large format units in an exclusive and popular location


watten house summary and analysis details for investment

Watten House Replacement Cost Analysis


Estimated breakeven cost for Watten House is expected to hover around $2678psf.


Given that UOL has indicated that large format homes are in the pipeline for this site, they are likely targeting next generation buyers of the well-heeled in the neighbourhood and right-sizers moving from landed homes to an easier to manage apartment for their retirement years.

watten house replacement cost breakeven analysis price discounts

In light of the successful sell out of their recent large format luxury condominium concept at Meyerhouse, it is likely that we will see unit sizes start from 16-1800sqft onwards and prices starting from $3500psf.


Launch date is expected in Oct 2023 and take up rate is expected to be healthy given its highly desirable location, pent up demand and surrounding good schools.


Within Watten Estate, there has not be any launches in more than a decade. As such, we do not find any meaningful comparisons within the estate given the large age disparity.


Nearby Dalvey Haus, TOPing soon, comes the closest with large format units and has shown healthy take up rates of 64% even at average prices of $3600psf.


Closest Project Comparisons to Watten House

watten house price comparisons to other projects

In Summary


We expect Watten House to be priced at a premium as large format luxury apartments within a sizeable land foot print is a scarcity in the estate.


With ABSD looming over owners with multiple properties, the well-heeled investors in the neighbourhood are likely to prefer larger apartments over holding smaller ones and will take a liking to this project.

Furthermore, with UOL’s premium standing in the real estate development circle, buyers are likely to accept paying a premium for Watten House.


That said, it may be more suitable as a legacy asset class for future generations than for absolute returns on investment.


watten house summary and analysis for investment

 

Finally The Arcady at Boon Keng, a centrally located property that is very convenient and near to an MRT station.



the arcady at boon keng summary and details for investment

With an estimated of 172 units, The Arcady at Boon Keng has an expected breakeven price of $2246psf and a freehold tenure.


the arcady at boon keng replacement cost breakeven analysis price discounts

Assuming a lean 10-15% profit margin, KSH will have to price units between $2500-2600psf.


At this price point, there will be many competing projects worth comparing across the RCR region, notably The Reserve Residences, Blossoms By The Park or The Landmark.


Closest Project Comparisons to The Arcady at Boon Keng


the arcady at boon keng price comparisons to other projects

The most recent project comparison is Jui Residences which completed in 2021 and fully sold at an average of $1867psf.


At a price point of $2500-2600psf though, it will represent a 35-40% premium over just 2 years old Jui Residences and might be alittle too much for investors’ comfort.


In Summary


In our opinion, The Arcady’s major selling points are its freehold status and central location close to an MRT.


However, its likely selling price means an absence of margin of safety for investors and its location next to a major and busy road could hinder future growth as buyers will likely not find it sufficiently appealing.


Evidence of subpar market performance can be witnessed from the lackluster growth in Eight Riversuites, right opposite The Arcady, over the last 4 years where most properties performed twice as well.


We will only recommend it for owner-occupiers and not for investors.



the arcady at boon keng summary and analysis for investment

 

In summary,


J'den would be most suitable for investment, Watten House would be a great own stay and legacy asset to pass down to future generations (Much like a Patek Phillipe), Hillock Green would be a ideal for owner occupiers and mid to long term investment and The Arcady, most suitable for owner occupiers and not for investment.


What do you think personally? Share your opinions in the comments box below.

 

Need an opinion on your property investment plans, the best buys available or help marketing your properties?


Get a 1-time free 30-Min Property Wealth Planning consultation with Stuart and his team of Property Wealth Planners. Schedule one right now.


A PWP consultation includes:


- An in-depth financial affordability assessment and timeline planning

- Highly relevant investment insights

- A clear and customised investment road map

- A curated list of best buys in today's market with good growth potential & minimal risks

- Selecting units with the highest potential in a new launch project

- Has your property stagnated in price? What options do you have?

- Marketing plan and getting an optimum offer for your property


top property real estate agent singapore leader

Stuart Chng, Executive Group District Director of Huttons Asia, is a renowned leader and personality in the real estate industry. He adores music and can play a few instruments decently without upsetting his neighbours. When not doing so, he enjoys pillow fighting with his son and coming up with silly puns which barely amuses his wife. Professionally, he is a licensed real estate agent, an avid stocks, options and real estate investor, multiple businesses owner, team leader, speaker and columnist for several property newsletters and blogs and is often quoted in media interviews on 938FM, Channel 8, PropertyReport, PropertyGuru and other publications. Throughout his career, he has helped many clients grow their wealth through selecting great property investments and managing their portfolios actively. Read his clients' reviews here. Stuart has also coached many top million dollar producing agents from top real estate agencies in Singapore. Read his agents' reviews here. Relevant Articles

- How To Select A Trustworthy Real Estate Agent? - Are Early Bird Discounts At New Launches Genuine Or A Marketing Gimmick?

- 4 Important Entry Signals for Improving Your Property Investment Returns - 12 Factors to Consider When Deciding On A Low Or High Floor Apartment

121 views
bottom of page