Pasir Panjang the next waterfront living belt?

PHOTO: Pasir Panjang the next waterfront living belt?

SINGAPORE - Pasir Panjang is best known for its port and wholesale industry facilities, and is hardly Singapore's most fashionable address.

But consultants say that both commercial and residential property in the area could make good medium-term investments.

It could become the next "waterfront living" belt, given its proximity to various west coast amenities such as science parks, business hubs and a university.

The largest new project in the district is the Mapletree Business City, a huge 1.7 million sq ft office and business park.

Completed in 2010, the business hub could be a significant source of office and residential tenants, noted Knight Frank research head Png Poh Soon.

Pasir Panjang is also close to Singapore Science Parks I and II and Alexandra Technopark, giving it access to an estimated 100,000 workers and residents in the vicinity, he said.

Also, the recent completion of the Haw Par Villa and Pasir Panjang MRT stations - both on the Circle Line - has helped to boost accessibility to the area.

But one might be forgiven for wondering if there is much space for many homes in the district.

After all, Pasir Panjang Terminal occupies the south and the National University of Singapore sits in the north-west of Pasir Panjang, along with large greenery belts formed by West Coast Park and Kent Ridge Park.

It is unlikely that many more new homes will be built here, consultants said, noting that there were no government land sale sites available in the Pasir Panjang area for the second half of this year.

Mr Eugene Lim, key executive officer at ERA Realty, said the scarcity of new launches in the area meant prices should "remain stable".

The residential area in Pasir Panjang is mainly private homes located along Pasir Panjang Road, stretching from the university to the MRT station.

Only a handful of new residential properties have been launched over the past two years.

Two- and three-bedroom units at 72-unit freehold Horizon Residences, which is expected to obtain its temporary occupation permit (TOP) next year, were launched at prices between $1,300 and $1,400 per sq ft in mid-2010. Ninety per cent of the units have been sold to date.

Other recent launches include 10-unit freehold Ria Apartments, 50-unit freehold Luxe Villa and Viva Vista, a freehold mixed development with 144 residential units and 106 commercial shops.

These are all expected to get TOPs between next year and 2014.

The homes at Viva Vista are mainly shoebox units and one-bedders, and were launched at $1,300 to $1,350 psf for larger units and $1,400 to $1,600 psf for shoebox units. All have been sold.

But both the private resale market and the rental market are fairly active.

Total resale transactions accounted for 52 per cent of all new sale, subsale and resale transactions in the last four years.

Mr Png said prices for new sale properties rose by about 13 per cent over the past year, with all transactions for private homes coming from Ria Apartments and Horizon Residences.

One bonus is that Pasir Panjang is cheaper than its neighbour, Telok Blangah. The average price of new sale and resale private homes in Pasir Panjang is estimated to be about 25 per cent and 22 per cent lower, respectively, than those in Telok Blangah.

As for the rental market, rents at freehold condo Parc Imperial, completed in 2010, range from $3,100 to $3,300 a month for a shoebox unit of 420 sq ft, translating to a gross yield of about 5 per cent.

Mr Lim said the residential projects in Pasir Panjang would likely appeal to buyers who prefer developments with fewer units.

But he noted that smaller projects tend to have higher maintenance fees and may not have full condo facilities, making them less appealing to tenants.