Parc Botannia property investment potential

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Situated in district 28, Parc Botannia is a new launch condominium near Jalan Kayu, a location with growing property investment potential.

Slated to TOP in 2020, Parc Botannia has 735 residential units spread over 4 blocks of 22 stories.

This post is going to introduce the property investment potential condition in Jalan Kayu with specific view onĀ Parc Botannia, a new launch condominium is slated to come to market soon. Investors should keep their eyes peeled on launch prices.

Besides Parc Botannia, there are a number of condominiums presently in the area such as

  • Riverbank @ Fernvale
  • The Greenwich
  • Sunrise Gardens
  • Seletar Springs Condominium
  • H2O residences
  • Seletar park residence
  • The Topiary
  • Mimosa Park
  • Serenity Park
  • Grande Vista

This will soon be joined by new projects such as High Park residences and Belgravia Villas.




District prices at about S$900 psf

Non landed property prices in the D28 is about S$900 psf.

Prices have trended down slightly from S$1,000 psf in 2015/2016.

However, prices are up from S$500 psf in 2010. This translates into an annual gain of about 8.4%.

If you owned an investment property, your total returns comprising capital gains and rental income would be in the 12-13% range (assuming rental income yield of about 3-4%).

Generally, returns for an investor would be quite good.

Furthermore, prices in this district is lower than much of other parts of suburban Singapore which are commanding about S$1,000 to S$1,400 psf.

D28 Jalan Kayu Selatar Price trend

Attractive rents for new condominiums

D28 Jalan Kayu Seletar rents

Rents for D28 non-landed condominiums are about S$1.7 to S$3 psf.

Noticeably, rents for newer condominiums, despite the large supply increase in residential units in the last 3 to 5 years, are substantially higher than condominiums that are more than 10 years old.

As an investor, the focus should therefore be on buying a newer condominium.

Newer condominiums command higher rents, even when adjusted for the supply situation

I think this is quite intuitive because renters would be particular about the ‘newness’ of a place they would be staying in for the foreseeable future.

Given a choice, not many people would want to stay in a worn-down, tired looking unit. And the numbers suggest that renters are willing to pay slightly more for a newer unit.

I think this is due to the mindset of renters being as such, “I will likely be staying here for 2 years so I wouldn’t mind forking out more money per month for a newer unit”.




In D28, some of the newer condominiums coming up are Parc Botannia (completing 2020), High Park residences (completing 2019) and Belgravia Villas (completing 2018).

Parc Botannia Jalan Kayu location

2.5% to 4% yields

Yields for existing condominiums in D28 are about 2.5% to 4% based on transactions in the last 6 months.

As an indication, the condominiums in the district are presently fetching these yields.

Riverbank @ Fernvale 3.8
The Greenwich 3.3
Sunrise Gardens 3.2
Seletar Springs condominium 3.2
H2O residences 3
Seletar park residence 2.9
The Topiary 2.9
Mimosa Park 2.6
Serenity Park 2.6
Grande Vista 2.4

Going by these as a guide, the upcoming new condominium Parc Botannia, and in addition, High Park residences and Belgravia Villas could be fetching about 3+% yields.



Neighbourhood

In the neighbourhood, the most famous landmark would be the Jalan Kayu prata shops.

Other notable amenities and schools nearby include Sengkang Green Primary School, Fernvale Primary School and Pei Hwa Secondary School.

Kindergartens include MOE Kindergarten @ Sengkang Green, PCF at Sengkang West and Chatsworth Kindergarten.

Greenwich V is a popular shopping mall that is about 5 mins drive from the Jalan Kayu road where Parc Botannia is located.

Jalan Kayu Greenwich V

Rental potential

The Jalan Kayu and Seletar has been targeted by the government and Urban Redevelopment Authority (URA) to be the upcoming fourth regional centre.

This follows the first three which are Tampines, Woodlands and Jurong.

New industries are intended to be developed in this cluster, which will contribute to the rentability of properties in the location.

One example of a new industry being developed by the URA is the aerospace cluster.

Notable tenants that will be taking up space in the Seletar Aerospace Park include Rolls-Royce Group, Eurocopter and ST Aerospace.

According to URA, up to 10,000 jobs high value add and high skilled jobs will be created.

For developments in the vicinity such as Parc Boatnnia which is located about 5 mins drive from Seletar Aerospace Park, there is likely to be demand for rental properties by workers in these industries.

Jalan Kayu Seletar Aerospace Park

 

All in all, Parc Botannia is an attractive new launch condominium that is likely to hold its own in a market with rising prices. The neighbourhood has a rustic, charming appeal, nestled off Jalan Kayu.

In addition, there is connectivity to the Tampiness Expressway and amenities such as good schools and a shopping mall.

For investors thinking of renting out the units, there is an immediate catchment of potential renters in the form of workers in the aerospace parks.