“River Place typically attracts local investors, as well as foreign investors, particularly those from China, Hong Kong and the UK,” says Regina Chung, deputy head, business unit at Knight Frank. Chung estimates that there have been at least a handful of transactions each month in recent months, and properties sold are a mix of studio units and larger three-bedroom apartments.
The studio apartments at River Place can command monthly rental rates of $3,600, while a partially furnished four-bedroom unit can fetch $17,000 a month, according to rental listings on propertyguru.com.sg. Investors are looking at rental yields of 4% to 5% a year based on current prices, she reckons. According to Chung, there are no completed residential developments in River Place’s immediate vicinity that has River Place’s high density, large units and full condo facilities. “Most of the properties in the Robertson Quay area, which is some distance away, are boutique developments and they’re usually smaller when compared with a property such as River Place,” says Chung. For instance, Watermark at Robertson Quay, which was completed in 2008, has 206 units with its largest unit sized at only 1,800sqft.
There are 41 large units at River Place that are still available for sale, according to the developer Far East Organization. Asking prices for the units range from $2.17 million for a 1,218sqft three-bedroom unit on the second floor, to more than $6.3 million for an 11th floor four-bedroom 3,649sqft unit.
Built 12 years ago, River Place provides full condo facilities such as a large swimming pool, Jacuzzi, tennis courts, gymnasium, as well as a putting green and even an outdoor giant chessboard in the garden. It therefore attracts a good mix of expatriate singles and couples, as well as families with children.
Of late, investors have been paying attention to the new condos along the Singapore River, and on their radar are sizeable condos such as River Place. From July 12 to 19, three units were sold at prices ranging from $1,390 to $1,425psf, according to URA Realis data.
All three units have changed hands three times since the project was launched in 1997, and the fortunes of the sellers mirrored the ups and downs of the property cycle. For instance, a 9th floor studio unit of 797sqft was first purchased in May 1997, which was at the peak of the property boom just months before the Asian financial crisis. The price the original buyer paid was $980,580, or $1,231psf. In March 2002, when the economy was in recession, the unit changed hands for $660,000 ($829psf), 32.7% below the purchase price. It changed hands a third time last month, and based on the transaction price of $1.14 million ($1,425psf), the seller saw a capital appreciation of close to 72%.
A three-bedroom 1,582sqft unit on the 6th level was first purchased in September 2000 for $1.46 million ($923psf), not long after the project was completed. The unit was sold in August 2006 for $1.09 million ($686psf), 25.7% below the original purchase price. The second owner, on the other hand, saw prices double when he sold the apartment last month for $2.2 million, or $1,390psf.
An 8th floor 721sqft unit that changed hands in July for $1.02 million ($1,414psf) was purchased in April last year for $850,000 ($1,179psf). Hence, the seller saw a 20% capital appreciation in just over a year. The original buyer had bought the unit in January 1999 for just $537,000 ($745psf), he saw a 58.3% appreciation in over a decade when he sold it last year.
Source: THEEDGE SINGAPORE
What stood out at us after reading the above article are:
• Only developer like Far East can have deep enough pockets to sustain a relatively high number of unsold units in a 99-year leasehold project that is more than a decade old, and still asking for prices that are substantially higher than what were transacted in the market. And this is not limited to River Place alone!
• Those who think that property prices are unlikely to fall below their initial launch prices, think again…
For those who are interested, below are transacted prices at River Place for the past 4 months:
River Place - Prices