Upcoming condo revives interest in Commonwealth

SINGAPORE - The upcoming launch of a new condominium in Commonwealth has given the mature estate renewed vitality.

Residential demand is likely to remain firm for the district due to its city fringe location, consultants say.

It is seen as a cheaper alternative to the neighbouring Alexandra area favoured by expatriates who move away from the city centre, said R'ST Research director Ong Kah Seng.

Knight Frank research head Alice Tan added that the future growth of the one-north precinct in the next five to eight years would propel a population increase in the vicinity and drive future residential demand for homes in Commonwealth. However, they also pointed out that investors who want to rent out units there may face competition from new projects in the nearby Redhill and Tiong Bahru districts.

The newest project to spring up in the area is the 99-year leasehold Commonwealth Towers at Commonwealth Avenue, by Hong Leong Holdings.

Official prices are not out yet but units there are expected to be priced around the $1,600 to $1,800 per sq ft (psf) range.

This makes the project more expensive than most of its neighbours across the street. The closest condominium to it is Queens at Stirling Road, followed by Alexis and The Anchorage.

Resale prices at those three projects have stagnated or achieved only slight increases last year, largely in line with the broader property market. However, all three developments saw strong rental demand last year.

Further down the road to the east is another cluster of condos that includes The Metropolitan Condominium and Ascentia Sky.

At the 722-unit Queens, completed in 2002, prices have averaged $1,350 psf over the past six months, according to caveats lodged with the Urban Redevelopment Authority (URA). The project is on a 99-year lease.

It commanded an average rent of $4.32 psf per month at the end of last year, URA figures show.

Resale prices and rents were higher at the newer, freehold Alexis along Alexandra Road.

The 293-unit project, completed in 2012, posted an average resale price of $1,939 psf over the past six months. Its rents at the end of last year were also higher than those at Queens, at $6.65 psf per month.

As for The Anchorage, which is opposite the Ikea furniture retail store, the 775-unit project had transactions averaging $1,385 psf over the past six months. Rents were $3.28 psf per month at the end of last year.

The popularity of Alexis may be due to the fact that a significant proportion of its units - about a third - are shoebox apartments of up to 500 sq ft, Mr Ong said.

However, he said this may not last because there will be many more shoebox apartments completed this year, adding that Alexis rents could stabilise at around $6.50 psf per month this year. In general, consultants said rents in the area could stagnate or fall due to a large supply of upcoming condos in the vicinity.

"The high influx of upcoming private residential developments in the Redhill and Tiong Bahru area may pose some competition for tenants," said Ms Tan.

Mr Ong said rents in the Commonwealth area could dip by up to 3 per cent this year from last year due to a tightened inflow of foreign professionals.

Commonwealth Towers will be launched on May 1.

melissat@sph.com.sg

This article was published on April 19 in The Straits Times.

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