How Parcwood Rose outsold them all
Its gamble to reconfigure the site with smaller studio apartments led to an impressive 90%+ take-up rate.
This expanded the original plan of 390 units to 689 units, and drove down prices to as low as $398,000, observed Maybank Kim Eng, which attracted deal-hungry investors.
Here's more from Maybank Kim Eng:
Tough property cooling measures. A dip in the economy. But none of these could douse the dream of owning a home, as evidenced by the sharp spike in sales at private residential property launches in the past two months. January saw 2,077 units sold, representing a whopping 210% jump from just 670 units sold in the previous month. February registered even better results with 3,138 new units sold. Parc Rosewood was the best-performing project in February. Located along Rosewood Drive close to the Seletar Expressway, it is a joint venture between Fragrance Group and Aspial Corporation and comprises 15 blocks of five-storey residential buildings. Surrounding it are several 99-year leasehold condominiums, such as Rosewood Suites, Rosewood, Casablanca and Woodgrove Condo. Further down the road is the recently launched Woodhaven, which consists of a mix of SOHOs, condominiums and townhouses. It is developed by Far East Organization. The take-up rate of both these projects was unexpectedly high and selling prices on average were a 55% premium over other projects in the area.
When it was first put up for tender, the Parc Rosewood site drew only three bids with prices ranging from $120m to $151.5m. Fragrance and Aspial paid $151.4m for the 294,719-sq-ft plot in June last year. Based on a maximum GFA of 412,616.4 sq ft, the land acquisition cost would translate to $367.2 psf ppr. We estimate the developers’ breakeven to be around $777 psf. Parc Rosewood offers 689 units, of which 626 have been launched. Demand has been robust so far, with a take-up rate of over 90%. Though the project was originally supposed to hold 390 units, the JV partners have reconfigured the site to accommodate more small units. Thus, studio apartments make up 40% of the total number of units. With prices as low as $398,000, the developers were able to attract a large number of investors. We estimate a rental yield of around 3.5%, taking into consideration Woodsland station becoming an interchange station in 2018. This could be a good chance to sweep up a snazzy new unit.