Parktown Residence Review – Tampines Ave 11 Integrated New Launch Development

This article is specifically written for investment minded property buyers that prioritise making money from property, as much as finding a comfortable place of dwelling for the family. 

The goal of this article is to cut through the marketing hype and present an objective review of the new launch project Parktown Residences. 

Before we dive into the investment consideration for this project, we will deal with all the contextual information that you will need to build a thorough understanding of the project and its location. 

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General Information

Parktown Residences is an integrated development, scheduled to be launched as the latest new launch development in Tampines North. 

It will garner much hype on the ground due to the following reason

• It being the first integrated development to launch in Tampines
• It being located in right next to the upcoming Tampines North Cross Island line MRT station
• Tampines North being an area marked as a new township development as an extension from Tampines Central. 

Developer Track Record 

The development is to be developed by big name developers Capitaland, UOL and SingLand. Capitaland is most recently known to have successfully developed and launched integrated development J’den that sold for record price in Jurong East. 

But take this with a pinch of salt, a developer competent in marketing and generating hype around a project and setting record selling price does not directly correlate with you making the most profit as a buyer. 

Having written numerous research pieces on new launch profitability, sometimes the projects that fly under the radar like Nava Grove, Principal Garden, Hundred Palms EC can emerge as the quiet underdogs that brings you the most profit. 

Having said that, Capitaland as a experienced mall manager does add a lot of credibility towards developing a integrating development. For integrated condo development, you would want to ensure a reputable and strong retails mix for the shops located beneath your condo. You would want to avoid integrated developments with individual strata title shops sold to individual investors and managed independently.

Plot Density

Plot density which equates to the amount of space between blocks, within common areas and between facilities is often a factor that is being overlooked when reviewing a new launch. 

Ultimately, it has a significant appeal towards resale buyers visiting the project after it TOP. Jadescape, Parc Esta are examples of developments that have got well spaced out facilities and common areas that attracted significant buyer’s interest. 

Parktown Residence is inline with other comparable integrated development in terms of plot density. Being a mega development it falls towards the higher end of the spectrum when it comes to plot density.

Location Analysis – Tampines North Avenue 11

The crux of Parktown Residence’s location is that it is located in the heart of Tampines North, right next to the upcoming Tampines North MRT.

There are 3 appealing narratives that come with its location. 

#1 – Infrastructure appreciation

There is always some sort of first mover advantage buying into a location before a MRT station is being constructed. Resale buyers will always be willing to pay a greater premium when they can physically experience the convenience of the MRT station vs an investor buying it off plan before MRT station is built. 

#2 – Tampines North District Transformation

Tampines North is going to be developed into an extension of Tampines central, similar to how Buangkok is to Sengkang, how Punggol North is to Punggol and Lentor is to Yio Chu Kang. 

Aside from future amenities and transport line development. What is important to note is that based on URA’s plan there is going to be 17,000 new HDB flats and 4,000 private residential units to be added to Tampines North. 

The 17,000 new HDB flat set the stage for future HDB grader demand for Parktown Residence, while the 4,000 new private residential units development serve as future price catalyst that can help prop up prices for Parktown Residence.

#3 – Tampines sizeable HDB Upgrader Demand

Applicable across all private condo developments in Tampines. The fact that Tampines as a district possesses the largest HDB dwelling population in Singapore serves as a ready source of buyer demand for private condos in Tampines. 

Parktown Residences stands out amongst existing condo developments in Tampines. It is located closest to a MRT station, while most private condos and ECs in Tampines are located 550m to 1500m away from the MRT station.

Near Term Price Catalyst and Threat for Parktown Residence

A District transformation comes with more government land sales which equates to more residential development that can help set new benchmark prices for Parktown Residence to price against. 

The two near term GLS land sale are as follow

Catalyst #1 – Tampines Street 94 – Integrated Development

The first being a potential positive catalyst for Parktown Residence, as the development of another integrated development in Tampines West could help set new and higher benchmark price for it to price against. 

Parktown Residence land bid breakeven price is 1,661, which is lower than that of Tampines Street 94 at 1,823. There is a high chance that the future integrated development in Tampines Street 94 will be priced higher than Parktown Residence.

Threat #1 – Tampines St 62 Parcel B – EC 

This is a site tendered for EC development named Aurelle, some see these EC owners as potential future buyers for Parktown Residences. But being a prudent analyst, we see an EC that is being priced at a lower price than Parktown Residences as a competition and a threat. 

Noticed that low land breakeven price of 1,316 vs Parktown Residence breakeven price at 1,661. 

Both Parktown Residences and its neighbouring Aurelle EC will take 3 years to be fully constructed. After 5 more years, Aurelle EC will achieve its minimum occupancy status and its units will be placed in the resale market as a potentially more affordable alternative to Parktown Residences.

Historical Performance of Condo in Tampines

While considering the purchase of a new launch in a particular location, it helps to get a sense of the buyer’s demand in the area. 

The price appreciation of the existing properties in the area, in the form of annualised price appreciation, provides a good indication of buyer’s interest, which in turn bids up the price of properties in the area.

Price appreciation for Private Condos in Tampines

Price appreciation for Resale EC in Tampines

Tale of 2 classes of Condo – Tampines Resale EC vs Tampines Private Condos

The price appreciation of properties in Tampines are generally healthy, but what’s more notable is that there seems to be a divide amongst two classes of condos when it comes to annualised capital appreciation. 

The resale ECs, enjoying a high 4%-5% annualised capital gain seems to be outperforming most private condos except for Treasure at Tampines and The Alps Residences which also enjoy 4% annualised capital gain. 

In addition, notice the Dist(m) column which indicates distance from Tampines Central MRT. Proximity to MRT seems to take a back seat when its comes to determining which condo sees the highest demand.

Affordability as the priority attribute for HDB Upgraders

Lower priced resale EC that are located further out for Tampines MRT seems to be generating equal, if not higher price appreciation.

Potentially this points to the fact that affordability is priority amongst HDB upgraders. We will resurface this observation as we analyse the profitability of other integrated developments. 

Parktown Residence Estimated Launch Price

Parktown Residence sits on the Tampines Ave 11 GLS land plot. It was secured with a breakeven price of $1,661. 

For normal new launches that are not integrated development, developers normally price up the development with a 15% to 20% margin based on breakeven price. 

On top of that, integrated development is normally priced with a 10% to 20% premium. With both these factors in mind, we came up with the following launch price estimate. 

We are anticipating Parktown Residence to be launched within the range of $2200 psf to $2400 psf.

PSF Price Comparison – Parktown Residences vs Comparable Private Condo in Tampines

Parktown Residences, being the newest and latest integrated development in Tampines. It may potentially set a benchmark price for Tampines. 

The closest comparable Treasure at Tampines priced at $1,699 psf is priced significantly lower. 

PSF Price Comparison – Parktown Residences vs Comparable New Launch

What is more appropriate is to compare Parktown Residences psf pricing to comparable new launches that are recently launched. 

With this in mind, we would reference the following entry price band below

• Under value buy – 2200 psf and below
• Fair value buy – 2200 to 2300 psf
• Cautionary – 2400 psf and above

Looking to invest in a new launch ? 

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It helps to have a detailed comparison of all the pros and cons across all new launch opportunities available. 

Drop as a whatsapp text and we will revert with a 5 factor comparison table of the best new launch opportunities available at the moment. 

Key factor to consider when considering Parktown Residence as an investment

Now let’s dive deeper into the investment case for Parktown Residence. If you were to strictly evaluate Parktown Residence as an investment, you will need to ponder on the following questions. 

1. Do Integrated developments that are priced at a premium make more money than condos surrounding it ?
2. How will private condo new launches fare in an area with multiple more affordable ECs and resale ECs as competition. 

Are Integrated Development Profitable ? Are they more profitable than other condo development surrounding it ?

To address this question let’s conduct a dipstick analysis, reviewing the annualised capital appreciation of 7 notable integrated developments compared to their neighbouring condo developments. 

Insight 1 – Out of the 7 OCR and RCR Integrated Development, Poiz is the only integrated development that outperforms its resale comparables.

Out of the 7 Integrated development situated in the heartlands, The Poiz Residences is the one that truly outperform the comparable private condos surrounding it. It sees a high 4% annualised capital gain compared ot its neighbouring Sennett Residences that only see a 1.7% annualised capital gain.

Insight 2 – Integrated developments are superior in terms of rental yield and rental demand

One thing that stands out for all integrated developments is that its rental demand and rental yield is superior to all comparable private condo developments in the same location. 

This proves that, the convenience integrated developments provide is an attribute that is highly valued by tenants. This will be a plus point for investors that are looking to purchase a unit for both rental income and decent capital appreciation.

Insight 3 – Private condo located next to an integrated development performed better

Referencing profitability analysis for both Integrated development, The Woodleigh Residences and SengKang Grand Residences. It seems that the condo development located a street away, which is priced 100 psf to 200 psf lower, enjoys higher capital appreciation than the integrated development itself.

Reference Park Colonial, condo across the street vs The Woodleign Residence and Esparina vs SengKang Grand Residences, both the lower priced neigbouring condo enjoy higher annualised capital appreciation than its neighbouring integrated development.

The Woodleigh Residences vs Neighbouring Private Condos

SengKang Grand Residence vs Neighbouring Private Condo 

Insight 4 – Resale ECs outperform private condos and integrated development

Referencing the case of Watertown integrated development in Punggol, you can see that both neighbouring private condo and resale EC outperformed the integrated development in terms of capital appreciation. 

Watertown vs Neighbouring Resale EC

Insight 5 – 3 Bedroom units within Integrated developments still enjoy healthy profit

To avoid over generalising, the aggregate capital appreciation and profitability of integrated development may not seem as profitable as comparable resale EC or resale condo.

But breaking it down further, when we look into profitability by bedroom type. You would realise that the underperforming units with integrated developments are actually the 1 and 2 bedroom units.

Where else the larger 3 and 4 bedroom units profitability can match up to that of a more affordable non integrated private condo or resale EC.

Referencing the following profitability comparison between Watertown and Prive EC as an example.

This is potentially due to buyers demand predominantly coming from family home stay buyers, who are willing pay a premium for the convenience that comes with a integrated development.

Profitability by Bedroom Type – Watertown Integrated Development vs Prive EC

Summary of strengths and weaknesses of Parktown Residence as an Investment Property

Summarising all the insights gathered from the earlier sections detailing Parktown Residence location, intrinsic buyer demand from Tampines and Profitability analysis for Integrated developments in general.

Let’s highlight the strengths and weaknesses of Parktown Residence.

Strength

• First mover advantage as the newest private condo development to tap on Tampines North district’s growth and transformation
• Condo development featuring the greatest proximity to MRT, as compared to existing condo developments that are most located at least 500m away from Tampines central MRT station.
• Proven rentability and high rental yield for Integrated development
• Lifestyle upgrade for buyers looking to purchase for both homestay and investment
• Larger 3 Bedroom and 4 Bedroom units within integrated developments can still be very profitable.

Weakness

• Less affordable when compared to the multiple existing resale EC development and upcoming new EC development in Tampines.
• Overall annualised capital appreciation could be potentially lower when compared to other private condo and resale EC in Tampines, due to the higher entry price for integrated developments.
• Absent of reputable primary within 1km radius

Opportunity

• Future launch of integrated development in Tampines west, Street 94 GLS land sale could set new benchmark price for Parktown residence to price against.
• Future launch of private condo in Tampines north and west to prop up prices.
• The completion of Tampines North MRT and the eventual completion of new amenities in Tampines North to serve as strong appeal for future buyer to pay a premium for a unit in Parktown.

Threat

• Launch of more affordable, competing EC development in the area, serving as more affordable option for buyer consideration.
• Prolonged holding duration required for Tampines north transformation and future price catalyst to be realised.

How should you approach Parktown Residence as an Investment

Taking in all the insights listed above, let’s dive into how we should most optimally approach Parktown Residence as an investment.

We felt that Parktown Residence are best for investors that are looking to achieve the dual objective of finding a good homestay property that can also have the potential to appreciate in value.

Adding that homestay element to the mix help mitigate the risk of having to wait out over a longer holding duration for the property to appreciate due to the premium being priced in for being an integrated development.

It will also give you the chance to full enjoy the premium you pay for when purchasing a integrated development.

Unit Type Consideration

Let’s consider what are the optimal unit type to consider when selecting a unit in Parktown Residence.

Referencing both Treasure at Tampines and Water Town integrated development both 3 bedroom and 4 bedroom units are the most profitable and have got the highest annualised capital appreciation.

Treasure at Tampines profitability by unit type

Watertown profitability by unit type

Next Steps – Groundwork

Aside from being an armchair researcher, this phase requires you to walk the ground. You will need to work with a competent new launch condo specialist to visit the showrooms.

The key takeaway in this phase is to have detailed understanding of the site plan, unit type and floor plan.

You must know which is the value stack, which is the premium stack, which is the stack to avoid and which unit type has the best layout.

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Book your New Launch Research Consultation now to make a confident and well-informed decision.

More Relevant Read Regarding New Launch Investment

• Pinery Residences vs Parktown Residences – Can Pinery Residences Win ?