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Thread: Mixed Development/Integrated Development Management Fee Calculation

  1. #1
    Join Date
    Nov 2015
    Location
    Duo Residences
    Posts
    229

    Default Mixed Development/Integrated Development Management Fee Calculation

    Mixed developments are becoming a highlight for future land use where URA blue sites can have residential component. Offices, retail and even hotel can become part of the mega development. There are a few notable ones like Duo, South Beach, Tanjong Pagar Centre being 4 in 1. There are few 3-in-1s (PLQ, Marina One) and 2-in-1s are becoming increasingly common. We will see more of them in the coming years as land use intensifies.

    There is a component that is often hidden during launch which is the management fee calculation. Having signed both Duo (2013) and PPR (yesterday), I can't help but noticed how this factor is calculated. I hope to shed some light for future investors looking at Mixed Developments even for 2-in1.

    Residents have to pay for both residential and shared spaces. Shared spaces can be pretty vast depending on the overall development size. Residents have to ask for share component of both residential (pool, carpark, security etc) and shared spaces (commercial/public accessed component) which can add up to a bigger sum. This factor eats into overall yield.

    Calculations that I personally witnessed:
    Park Place Resident Total Management fee: Unit Share/Total Residential Size + Unit Share/Total Shared Space <itemised>
    Duo Residence Total Management fee: Unit Share/ (Total Residential Size + Shared Space) <one overall figure only>

    My point is for investors who are looking at mixed developments in the future, do take note of this shared space calculation as a total. The bigger the mixed development, the larger the shared space. Agents and developers might not have fully explained this to you.

    2 Cents,
    PropVestor

  2. #2

    Default

    Care to share what is the projected value for a 1 or 2 bedded is such development?
    To serve as a comparison point for other single use residential project. Many thanks in advance for the sharing.

  3. #3
    Join Date
    Nov 2015
    Location
    Duo Residences
    Posts
    229

    Default

    Based on mentions at the sales gallery (1 bedder minimal share starting amount):
    Duo Est $350
    PPR Est $400
    For both, I added about $100 more for inflation etc since its 2-4 years down the road. Since both are Green Mark Platinum certified, this should have some effect on the long term maintenance fee to some extent. Correct me if I am wrong.

    Shared space for Duo is definitely lesser than PPR's 100,000 sqft.

    PPR calculation: 33/16,000 (PPR facilities only) + 33/100,000 (shared space) for single bedder of 489 SqFt. Based on back of envelop calculation by % share and estimated per month maintenance costs, it should be about $400 to $500 for first year onwards. Again, this is strictly my own estimated calculation. Please share yours if you have any.

    2 cents,
    PropVestor

  4. #4
    Join Date
    Oct 2012
    Posts
    1,062

    Default

    And also don't forget still need sinking fund after first year besides maintenance fee.

  5. #5

    Default

    Quote Originally Posted by PropVestor View Post
    Based on mentions at the sales gallery (1 bedder minimal share starting amount):
    Duo Est $350
    PPR Est $400
    For both, I added about $100 more for inflation etc since its 2-4 years down the road. Since both are Green Mark Platinum certified, this should have some effect on the long term maintenance fee to some extent. Correct me if I am wrong.

    Shared space for Duo is definitely lesser than PPR's 100,000 sqft.

    PPR calculation: 33/16,000 (PPR facilities only) + 33/100,000 (shared space) for single bedder of 489 SqFt. Based on back of envelop calculation by % share and estimated per month maintenance costs, it should be about $400 to $500 for first year onwards. Again, this is strictly my own estimated calculation. Please share yours if you have any.

    2 cents,
    PropVestor
    Thanks for the sharing, appreciate it. Timely as I'm looking at Artra and the same question pop up and my agent wasn't able to explain clearly though it could be they have not been briefed with the details.

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