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Singapore Property - Wingtai-Keppel Land goes head-to-head with Oxley in District 19

Shared By Stock Fanatic on Friday, June 8, 2018 | 8.6.18

■ Two major launches at District 19 going head-to-head

■ Close to 10% of total units (1,665 units) sold on launch weekend

■ More supply in the coming quarters in the vicinity

When two giants collide: Affinity at Serangoon and Garden Residences go head-to-head!
■ Over the weekend, two of the largest projects in District 19, Affinity at Serangoon (Oxley Holdings) and The Garden Residences (JV between Wingtai and Keppel Land) was launched for sale and collectively secured over 170 buyers.

■ The build up to the launch was widely anticipated as the take-up for these projects will be a good pre-cursor to demand for new units in the location which is expected to see a fair amount of new supply from recent en blocs.

■ Based on media reports, both projects saw "healthy" first weekend sales, with Affinity at Serangoon securing 112 buyers (out of 300 units launched), while The Garden Residences saw more than 60 units sold.

■ Sales for Affinity at Serangoon was well spread over one-bedders to four-bedders-plus-study apartments with three out of ten strata houses sold at an average of S$2.33m.

■ Prices for both projects set a new benchmark for the location with Affinity at Serangoon achieving an average selling price of S$1,550 psf while Garden Residences units were sold at a tad higher at S$1,660psf.

■ Based on selling prices, if sustained, these translate into a margin of 14% (The Garden Residences) and 19% (Affinity at Serangoon) respectively.

How do they compare?
■ Based on marketing materials by agents, we do note that Oxley's Affinity at Serangoon has more varied unit-types (by virtue of the larger estate) and have more flexibility and space to cater to a wider range of family types.

■ Comparing the 1/2/3-bedroom units, it appears that Affinity at Serangoon's average unit sizes (by type) are generally bigger by 30-50 sqft. Therefore, we believe that buyers who are restricted by total quantum will prefer slightly larger units at Affinity at Serangoon vis-à-vis The Garden Residences. The differentiating factor will then come from buyer perception of "good quality and prestige" from a Keppel-Wingtai project compared to "practicality and value" from Oxley. Who wins? We will know in time.

More choices for homebuyers as competition heats up in the vicinity; but upcoming projects have higher breakeven points.
■ Given competition, buyers' attention appears to be split and we believe this had somewhat affected the weekend sell-through rates for both projects.

■ The journey, while early, is still long with close to 1,665 units for both projects (1,052 for Affinity at Serangoon and 613 for The Garden Residences) looking for buyers.

■ Given that both projects are located near a sprawling Serangoon landed estate and a sizeable population living in nearby HDB flats, we believe that inherent demand for upgraders (new families) to be located near existing homes will remain strong.

■ While still early, we do note that in the pipeline, other projects in District 19 (former Rio Casa and former Florence Regency) which in total is expected to add another 2,800 units (estimated 1,400 units each) are targeting for launch in the coming months, which could mean more choices for buyers and sales momentum could slow somewhat.

■ Apart from the former Rio Casa development which is won by Oxley, where we believe the timing of launch and strategy can be managed, the former Florence Regency site's (won by Logan Property) higher breakeven (estimated at S$1,400 psf or above) will need the incumbent projects to do better in order to achieve higher selling prices.

■ Singhaiyi, with two projects at How Sun Drive (former How Sun Park and Sun Rosier) with close to 380 units in the wings, will need rosier times with breakeven prices in the north of S$1,600-1,800 psf.

■ This sets the stage for the upcoming 2 Woodleigh property developments and possibly prices above S$2,000 psf may not seem all that impossible now.

Source : DBS Group Research
(Read Report)

Posted on Friday, June 8, 2018 | 8.6.18
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