ONE-NORTH EDEN: POTENTIALLY A GREAT CONDO IN A GROWTH AREA?
Located within District 5, One-North Eden is a 99-year leasehold project that features 165 units and is 400m (7-min walk) away from the One-North MRT Station. The developer leading this project is TID Residential Pte Ltd, a joint venture between Hong Leong Holdings and Mitsui Fudosan Co.
The land site was released for tender under the Government Land Sales (GLS) programme in 2H2019, with the highest bid valued at S$155.7 mil. Based on the size of the site area, 5778.70 m², the potential gross floor area (GFA) is 15,458 m² – translating to a base price of S$956 psf.
After taking into consideration expenses such as construction costs, legal fees as well as profit margin, One-North Eden can be expected to be priced at an estimated minimum of S$1,707 psf. However, if we factor in the average overall price of a unit for a 1 BR, 2BR and 3BR in the area,, we estimate the project to be priced around S$1,900 psf.
|Unit Type||Unit Size (sqft)||Pricing|
|1BR + S||517||~ 0.09 mil|
|2BR||689||~ 1.31 mil|
|3BR Compact||947||~ 1.80 mil|
|3BR Premium||1.119||~ 2.13 mil|
Estimated pricing of units based on S$1,900 psf
Additionally, the Government plans to release 2 more parcels of land sites for residential development in the area. This means that there will be an increased supply of residential units on the market in the years to come. Given that the Government is releasing more land in the area, it goes to show that they see potential in it and are also anticipating demand to increase too.
Using our 5 criteria, let us analyse One-North Eden to determine whether the project is worth its weight in gold, be it for own stay or investment.
One-North Eden is located within the One-North Development, a vibrant area for innovation and research. There are a lot of commercial activities going around within the One-North precinct and much of the land within the area is also going to be further developed. Hence, we anticipate a growing demand for higher paying jobs, which may result in an increase in supply of potential tenants for the residential projects in the area.
The Dover Knowledge District is another critical area that will positively impact housing prices in tandem with the One-North Development. As One-North continues to develop over the next 5 to 10 years, this will create a spillover effect from the increase in jobs in the Dover Knowledge District especially considering how close One-North Eden is located in the vicinity.
In addition to the 2 parcels of land being released under the GLS programme, there are even more vacant plots of land that are subjected to planning. This reaffirms our hypothesis that the Government is indeed anticipating the possibility of an increase in demand in the One-North area.
Timeline for growth areas to impact One-North Eden
With all this incoming potential growth, it is important to take note of the timeline that these developments will take effect on residential property prices. The ongoing development of the One-North precinct will be one to watch for in the short-term, while the Dover Knowledge District in the mid-term at 5 to 10 years. The effects of the vacant plots of land, that are subject to planning under the URA Master Plan, will kick in to help with the vibrancy and value of the area in the long-term.
Criteria #2: Unique Selling Points
An upside to One-North Eden is that Fairfield Methodist Primary School, one of the top 20 most popular schools in Singapore, is located within a 1km radius of the project. There will likely be higher demand for 2 BR and 3 BR units as parents who want to place their young children in popular schools may be motivated to move to the area. There are also other schools located near the project which include United World College (UWC), INSEAD Asia Campus, Singapore Polytechnic, National University of Singapore (NUS), to name but a few.
The Star Vista is just a 650m walk away from One North Eden, making it very convenient for residents to access places to dine, shop and entertain. There are also many supermarkets nearby for residents to choose from including Cold Storage, NTUC, Giant and Sheng Shiong.
For those who are looking to purchase property for investment, it is incredibly important to invest in areas with a diverse tenant pool. This is to avoid any unforeseeable circumstances in the future. With many educational institutions (for both local and international students) as well as a growing number of job opportunities being created in One-North, a diverse tenant pool can help mitigate the risks of being unable to secure tenants during challenging times.
Criteria #3: New Launch Comparison
Comparing One-North Eden with other new launches in the surrounding area works as a great benchmark to see whether the project is a worthwhile purchase. Although there is an abundance of new launch projects nearby, we have selected Normanton Park due its mutual growth areas – One-North Development.
The estimated quantum for 1 BR units at Normanton Park, range between S$0.77 mil to S$0.99 mil while One-North Eden is estimated to start from S$0.98 mil, based on S$1,900 psf. Possible tenants looking to rent 1 BR units are likely professionals working in One-North. Given the ease of getting around the One-North area is about the same for both projects, it may make more sense to look into Normanton Park due to its lower quantum.
Normanton Park’s 2 BR units have an estimated starting range between S$1.05 mil to S$1.32 mil while One-North Eden is estimated to start from S$1.31 mil. For 3 BR units, Normanton Park’s units are estimated to start between S$1.44 mil to S$1.87 mil, while One-North Eden is estimated to start from S$1.80 mil and can go as high as S$2.13 mil.
Even though the quantum for One-North Eden is higher than Normanton Park, it has a strong competitive edge being much closer in proximity to schools like Fairfield Methodist Primary School and UWC. This may influence families looking to place their children in these schools due to its convenience.
Criteria #4: Resale Project Comparison
Aside from new launch comparisons, it is also important to use resale projects as a benchmark for exit strategies. There is no shortage of resale projects in the area and we have selected the newest projects as subjects of comparison: The Rochester Residences (2011) and One-North Residences (2009).
For 1 BR units, Rochester Residences start from S$1.29 mil (839 sqft, S$1,538 psf); One-North Residences start from S$0.98 mil (592 sqft, S$1,520 psf); while One-North Eden is estimated to start from S$0.98 mil. 1 BR units usually tend to be around 500 sqft, thus making One-North Residences a better comparison against One-North Eden. The quantum of both projects seem comparable, pending the release of the developer’s psf.
For 2 BR units, Rochester Residences start from S$1.78 mil (1,207 sqft, S$1,475 psf); One-North Residences start from S$1.49 mil (980 sqft, S$1,520 psf); while One-North Eden is estimated to start from S$1.31 mil.
If One-North Eden does start around S$1.31 mil, the project becomes quite palatable. because even if the property appreciates by 15% to 20% to S$1.5 mil, it still is reasonably priced for the next buyer.
Generally, it would be best to avoid purchasing high quantum properties in Singapore as it tends to be harder to sell it off and attain good capital appreciation at the same time. The reason for this is due to buyers needing to qualify for a higher total debt servicing ratio (TDSR) which may limit the buyer pool.
For 3 BR units, Rochester Residences start from S$2.28 mil (1,679 sqft, S$1,358 psf); One-North Residences start from S$1.78 mil (1,109 sqft, S$1,605 psf); while One-North Eden is estimated to start from S$1.80 mil. At higher quantums, it gets tougher to secure tenants unless buyers plan to purchase these units for their own stay. However, for buyers still looking to purchase 3 BR units for investment, co-living tenants could possibly be an option especially given the diverse tenant profiles from local and international students to working professionals in the area.
Criteria #5: Exit Strategy
Overall, One-North Eden looks to be price competitive against fellow new launch project, Normanton Park. Despite Normanton Park’s lower quantum, One-North Eden may be the more attractive option due to its great location being within a 1km radius of popular schools like Fairfield Methodist Primary School and convenient accessibility to amenities.
Given One-North Development which will create more jobs in the future, purchasing a project such as One-North Eden in a high growth area will likely be a good move for mid- to long-term investors.
One-North Eden is potentially a great development that would suit 2 types of buyers: 1 BR units are better suited for investors while 2BR and 3BR units might be better suited for families looking to place their children in popular schools in the area. From an investor perspective, One-North Eden has great potential to attract the diverse pool of tenants in the area due to its attractive location.