Revised Central Area (RCA)

[Ringo33]

With the new boundary line drawn for revised central area (RCA), do you think that property within the RCA is becoming more attractive because of the flexibility of building MM? I know that 70sqm is not going to affect most developers, but that doesnt mean that URA will not revised it to 80 or 90sqm in future. So for long term investors planning to buy FH property for future enbloc, perhaps it might be better to buy within the RCA instead of the outside.

http://www.ura.gov.sg/circulars/text/dc12-13.pdf

[leesg123]

With the new boundary line drawn for revised central area (RCA), do you think that property within the RCA is becoming more attractive because of the flexibility of building MM? I know that 70sqm is not going to affect most developers, but that doesnt mean that URA will not revised it to 80 or 90sqm in future. So for long term investors planning to buy FH property for future enbloc, perhaps it might be better to buy within the RCA instead of the outside.

http://www.ura.gov.sg/circulars/text/dc12-13.pdf

Where got revised? still same boundary wat.

No, those that are just 700m outside the boundary will be best. U see, yes, though, no control inside, if developer bid higher and higher price inside, the mm units will be launched at a higher price too. With a high price, the rental to be charged to tenants is going to be very high too.

So, wat if tenants love central area yet want a more competitive rental? Choose those that are just outside the boundary. Those mm supply just outside the boundary are limited by supply due to URA ruling. As the buying price of mm will be lower than that in the central due to high land cost, the rental charged will be lower too. So u see the advantage. Just a few steps into the Central area, yet lower rental charged. So, more attractive to tenants.

[Ringo33]

Where got revised? still same boundary wat.

No, those that are just 700m outside the boundary will be best. U see, yes, though, no control inside, if developer bid higher and higher price inside, the mm units will be launched at a higher price too. With a high price, the rental to be charged to tenants is going to be very high too.

So, wat if tenants love central area yet want a more competitive rental? Choose those that are just outside the boundary. Those mm supply just outside the boundary are limited by supply due to URA ruling. As the buying price of mm will be lower than that in the central due to high land cost, the rental charged will be lower too. So u see the advantage. Just a few steps into the Central area, yet lower rental charged. So, more attractive to tenants.

the boundary of CCR and RCA is actually different. e.g. places like Holland, bukit timah etc are no part of the RCA.

Are you saying that you expect developers will bid higher in RCA region because of no control?

[leesg123]

The red line has always been the boundary line for central area.

In a nutshell, get those small format units that are under 1km outside from the boundary line. Reason being, they are super close to the central area (in fact no diff) and less competition due to limit in supply cos ura new rule.

[Ringo33]

The red line has always been the boundary line for central area.

In a nutshell, get those small format units that are under 1km outside from the boundary line. Reason being, they are super close to the central area (in fact no diff) and less competition due to limit in supply cos ura new rule.

The boundary line of CCR and RCA is different. Here is a map of CCR for your reference. http://spring.ura.gov.sg/lad/ore/login/map_ccr.pdf

My question is about enbloc potential and future capital appreciation of property within RCA. If you are talking about rental demand for property outside RCA then it need not be 1km away from RCA boundary, but rather near MRT station.

[dtrax]

There is no revision, is just that most pple knows these what is collectively known as CCR.. aka artas areas. In fact URA has 3 definitions, if central area and CCR is not confusing enough

Central Region: Central Region comprises the following 22 Planning Areas : Downtown Core, Orchard, Marina East, Marina South, Museum, Newton, Outram, River Valley, Rochor, Singapore River, Straits View, Bishan, Bukit Merah, Bukit Timah, Geylang, Kallang, Marine Parade, Novena, Queenstown, Southern Islands, Tanglin and Toa Payoh.

Core Central Region: It comprises postal districts 9,10, 11, Downtown Core and Sentosa.

Note: CR = CCR + RCR

Central Area: It comprises the following 11 Planning Areas :Outram, Museum, Newton,River Valley, Singapore River, Marina South,Marina East, Straits View, Rochor, Orchard and Downtown Core.


So got 3 "centrals": CR, CCR and CA

[leesg123]

There is no revision, is just that most pple knows these what is collectively known as CCR.. aka artas areas. In fact URA has 3 definitions, if central area and CCR is not confusing enough

Central Region: Central Region comprises the following 22 Planning Areas : Downtown Core, Orchard, Marina East, Marina South, Museum, Newton, Outram, River Valley, Rochor, Singapore River, Straits View, Bishan, Bukit Merah, Bukit Timah, Geylang, Kallang, Marine Parade, Novena, Queenstown, Southern Islands, Tanglin and Toa Payoh.

Core Central Region: It comprises postal districts 9,10, 11, Downtown Core and Sentosa.

Note: CR = CCR + RCR

Central Area: It comprises the following 11 Planning Areas :Outram, Museum, Newton,River Valley, Singapore River, Marina South,Marina East, Straits View, Rochor, Orchard and Downtown Core.


So got 3 "centrals": CR, CCR and CA

Thank you very much for the clarification! A good learning point!

[dtrax]

With the new boundary line drawn for revised central area (RCA), do you think that property within the RCA is becoming more attractive because of the flexibility of building MM? I know that 70sqm is not going to affect most developers, but that doesnt mean that URA will not revised it to 80 or 90sqm in future. So for long term investors planning to buy FH property for future enbloc, perhaps it might be better to buy within the RCA instead of the outside.

http://www.ura.gov.sg/circulars/text/dc12-13.pdf

From my stats at:
http://forums.condosingapore.com/sho...9&postcount=47

In Central Area, in terms of vol. for MM units [up to 46.5sqm] it is still alot lesser compared to outside central areas. That is the reason why there isnt a restriction in these areas. If you see the MMs in those more stringent areas in non CA areas, can really vomit blood by the amount of units that are gonna TOP in future. URA impose up to 70sqm to prevent to developers not only trying to build MM studios but also trying to squeeze 2 or 3rms into a 753 sq ft unit. Of cse a unit of this size in CA is gonna cost >1mil anyway.

[Ringo33]

There is no revision, is just that most pple knows these what is collectively known as CCR.. aka artas areas. In fact URA has 3 definitions, if central area and CCR is not confusing enough

Central Region: Central Region comprises the following 22 Planning Areas : Downtown Core, Orchard, Marina East, Marina South, Museum, Newton, Outram, River Valley, Rochor, Singapore River, Straits View, Bishan, Bukit Merah, Bukit Timah, Geylang, Kallang, Marine Parade, Novena, Queenstown, Southern Islands, Tanglin and Toa Payoh.

Core Central Region: It comprises postal districts 9,10, 11, Downtown Core and Sentosa.

Note: CR = CCR + RCR

Central Area: It comprises the following 11 Planning Areas :Outram, Museum, Newton,River Valley, Singapore River, Marina South,Marina East, Straits View, Rochor, Orchard and Downtown Core.


So got 3 "centrals": CR, CCR and CA

I am aware of that, what I am trying to say is that will that CA region now be a more attractive investment region within the CCR for investors due to the lack of building restriction. From an investment point of view, will you rate CR = grade A, CCR = Grade A+, and CA = A++

[blackjack21trader]

With the new boundary line drawn for revised central area (RCA), do you think that property within the RCA is becoming more attractive because of the flexibility of building MM? I know that 70sqm is not going to affect most developers, but that doesnt mean that URA will not revised it to 80 or 90sqm in future. So for long term investors planning to buy FH property for future enbloc, perhaps it might be better to buy within the RCA instead of the outside.

http://www.ura.gov.sg/circulars/text/dc12-13.pdf

yes, bro ringo33, u asked the right question and yes, the right humble but handsome person is within this forum to answer you. u are very lucky indeed.

let me tell you a story first.

But in the 1980s-1990s, when your brother was still a Victorian in Jalan Baser, a dragonfly flew and landed on my forehead. ever since, my classmates were amazed at my predictive power of 4Ds and totos. Little did they know, that the dragonfly has opened my third eye. Now fast forward to the 2000s:

My opened third eye saw many younger generation , who are professional getting more affluent and become world traveller. as a matter of fact, the airlines no longer called the tourists tourists but traveller. And why is it so ? Let me continue and please be patience:

These young affluent professionals are global travellers, yes indeed they work hard and play hard and must travel at least twice every year no matter what. Now I am not only referring to Lions but younger generation from all the developing and developed countries of our Mother Earth:

Only in 2005, there arises a problem. This problem is the escalation of fuel costs and hence translated into high hotel rates. If you check all the hotel rates all over the Eastern part of the World in the major cities, they are nearly all about US$200 and above. And they are there not by chance but due to inflationary pressures. Indeed in the early morning of 2007, just before the 2008 crash, another dragonfly flew and landed this time on my nose. And then, and then...and then my fourth eye was opened !!!!

This fourth eye is better than my third eye because ,because, because...it can see through ...see through walls............and... and... and NOT FABRIC la......sigh yo...let me continue:

So by 2009, the travelling costs of these frequent world travellers became very high, in particular, the accomodation costs. And in late 2010, after the FED pumped much money into the global system, the one bedder studios in Hong Kong TST and Hong Kong Main Island was taken up aggressively by these new class of travellers. How so ? At the same time they can invest in property, they nearly cut all the accomodation costs to ZERO !!!!!!!!


WAHLAUEH......I cannot go further liao............tell u later in 25 Dec 2012.

BYE !!!

[leesg123]

From my stats at:
http://forums.condosingapore.com/sho...9&postcount=47

In Central Area, in terms of vol. for MM units [up to 46.5sqm] it is still alot lesser compared to outside central areas. That is the reason why there isnt a restriction in these areas. If you see the MMs in those more stringent areas in non CA areas, can really vomit blood by the amount of units that are gonna TOP in future. URA impose up to 70sqm to prevent to developers not only trying to build MM studios but also trying to squeeze 2 or 3rms into a 753 sq ft unit. Of cse a unit of this size in CA is gonna cost >1mil anyway.

Thanks, looking at the posting on your analysis, the non central area also encompass some d10 & 11 area e.g. bt timah and tanglin, these places are part of core central region, high psf is understandable. Would you be able to do a separate analysis for bt timah and tanglin, and remove them from the non central area analysis, see if the price band will move.

[phantom_opera]

brother BJ is 二郎神

[blackjack21trader]

Thanks, looking at the posting on your analysis, the non central area also encompass some d10 & 11 area e.g. bt timah and tanglin, these places are part of core central region, high psf is understandable. Would you be able to do a separate analysis for bt timah and tanglin, and remove them from the non central area analysis, see if the price band will move.

dun need lah..tanglin wil cheong to the roof I am sure hor.....WOAHAHAHAHAHAHHAHAHAHHHEHEHEH

[blackjack21trader]

brother BJ is 二郎神

woahahahahhahahhah...FUNNY ! bro ghost how's everything, hor say bo ...hehehehehehhehehe

[phantom_opera]

woahahahahhahahhah...FUNNY ! bro ghost how's everything, hor say bo ...hehehehehehhehehe

hosay boh depends on Bernanke

[blackjack21trader]

hosay boh depends on Bernanke

tio tio....well said

[Ringo33]

hosay boh depends on Bernanke

see mario bro no up?

[dtrax]

I am aware of that, what I am trying to say is that will that CA region now be a more attractive investment region within the CCR for investors due to the lack of building restriction. From an investment point of view, will you rate CR = grade A, CCR = Grade A+, and CA = A++

CA will always be A++, check out Clift. Below 500sqft, my agents already sent me a few lobangs claiming close to 5% yield even at almost 1.2mil. The time it will downgrade from A++ is when the demand drops. Even if hit by recession, most tenants who wish to stay in CA area are more willing to downgrade to a 3k rental in MM compare to a 4.5k studio rental in the same area if there is any cost cutting. Plus I agree with what bro BJT said, buy investment grade near a cluster of hotels cant go wrong either.. corporate lease of a CA MM @ say maybe $3k/mth without cleaning works out to less than $100/day compare to twice the amount what hotels are charging

[Ringo33]

CA will always be A++, check out Clift. Below 500sqft, my agents already sent me a few lobangs claiming close to 5% yield even at almost 1.2mil. The time it will downgrade from A++ is when the demand drops. Even if hit by recession, most tenants who wish to stay in CA area are more willing to downgrade to a 3k rental in MM compare to a 4.5k studio rental in the same area if there is any cost cutting. Plus I agree with what bro BJT said, buy investment grade near a cluster of hotels cant go wrong either.. corporate lease of a CA MM @ say maybe $3k/mth without cleaning works out to less than $100/day compare to twice the amount what hotels are charging

very interesting way of looking at it. so I guess if its CA, FH and near MRT, it shouldn't go wrong.

[leesg123]

CA will always be A++, check out Clift. Below 500sqft, my agents already sent me a few lobangs claiming close to 5% yield even at almost 1.2mil. The time it will downgrade from A++ is when the demand drops. Even if hit by recession, most tenants who wish to stay in CA area are more willing to downgrade to a 3k rental in MM compare to a 4.5k studio rental in the same area if there is any cost cutting. Plus I agree with what bro BJT said, buy investment grade near a cluster of hotels cant go wrong either.. corporate lease of a CA MM @ say maybe $3k/mth without cleaning works out to less than $100/day compare to twice the amount what hotels are charging

Including near service apartments? How much does fraser suites.or citadines at wilkie charged per mth?

[leesg123]

CA will always be A++, check out Clift. Below 500sqft, my agents already sent me a few lobangs claiming close to 5% yield even at almost 1.2mil. The time it will downgrade from A++ is when the demand drops. Even if hit by recession, most tenants who wish to stay in CA area are more willing to downgrade to a 3k rental in MM compare to a 4.5k studio rental in the same area if there is any cost cutting. Plus I agree with what bro BJT said, buy investment grade near a cluster of hotels cant go wrong either.. corporate lease of a CA MM @ say maybe $3k/mth without cleaning works out to less than $100/day compare to twice the amount what hotels are charging

Balestier also got many mm and many hotels (fragrance, value, zhongshan park, quality hotel). Balestier mm safe bet too??!

[Ringo33]

Not sure if you guys noticed that URA has included in new boundary lines for their Master Plan 2008

[dtrax]

Balestier also got many mm and many hotels (fragrance, value, zhongshan park, quality hotel). Balestier mm safe bet too??!

No 3rd eye, so cant tell if the future demand will fulfil or outstrip demand there.. Balestier MMs are on the rise but not as insane in Joo Chiat,Jln Eunos, Geylang area. Many in recent launches in D12 n newton are marketing with prospect of the medical hub. Newton area still not so MM infested, the latest is probably lincoln residences if I can recall off hand.
IMO, MM is a proven concept. The only concern is the entry price to determine if it is a gd investment in terms of yield and capital appreciation, for D12 or CA areas, can safely estimated rough rental. I cant say for other areas in mass market region unless it is price to sell

[ekl2ekl2]

No 3rd eye, so cant tell if the future demand will fulfil or outstrip demand there.. Balestier MMs are on the rise but not as insane in Joo Chiat,Jln Eunos, Geylang area. Many in recent launches in D12 n newton are marketing with prospect of the medical hub. Newton area still not so MM infested, the latest is probably lincoln residences if I can recall off hand.
IMO, MM is a proven concept. The only concern is the entry price to determine if it is a gd investment in terms of yield and capital appreciation, for D12 or CA areas, can safely estimated rough rental. I cant say for other areas in mass market region unless it is price to sell

Not true about Newton. It is also going to get swarmed with MM and MM-like units, Lincoln suites, 26 Newton, suites@newton, NEWTON EDGE, Lviv etc. asking from 2000-2800pfs. How to have good yield and capital appreciation?

[leesg123]

Not true about Newton. It is also going to get swarmed with MM and MM-like units, Lincoln suites, 26 Newton, suites@newton, NEWTON EDGE, Lviv etc. asking from 2000-2800pfs. How to have good yield and capital appreciation?

Buy high, charge high rent lor. Cheaper than orchard hotel can alread.

[ekl2ekl2]

Buy high, charge high rent lor. Cheaper than orchard hotel can alread.

Maybe no need orchard hotel.

Hotel Royal at Newton road, sandwiched bet suites newton and 26 newton, room rate cheapest room around $180/night

[dtrax]

Not true about Newton. It is also going to get swarmed with MM and MM-like units, Lincoln suites, 26 Newton, suites@newton, NEWTON EDGE, Lviv etc. asking from 2000-2800pfs. How to have good yield and capital appreciation?

Thanks for pointing these out, my selection criteria for a MM unit is slightly different from what most would typically defined as anything below 500sqft is considered a MM. Also MM units in my case only applies to 1rm.

For my selection criteria anything from 3xx-400sqft will be deem as MM. The reason is very simple. If you check the prices of those 500sqft, 470 sqft units the prices in terms of absolute quantum easily exceeds $1mil in CA or even CCR.

What is deem as a MM unit by my standard is low sqft low quantum. For example skysuites@anson 700K+ for 365sqft will be a MM. A 495sqft clift at 1.15mil will not be a MM by my standard. V on Shenton @ close to 1mil if not exactly cheap either. If you apply the same to 26 Newton, each unit will easily cost more than a mil. A 431sqft, 8 Bassien condo close to 800k will probably fit the bill as a MM category.

What does this imply? For a 1.1mil+ MM or even a 1mil MM you need to rent out your unit at a substantial rate that is close to those 1rm studios in CCR to get a decent yield. Likewise for a 700-800k "real" MM in CA or CCR, you can comfortably rent out to as low as mid 2k per month if situation is bad enough and you still can hit a 4% gross for a 750k unit. Plus at 2.5k - 3k p.m you can even fight with hotels nearby at <$100 per day without daily cleaning services. The tenant can even hire a part time cleaner for a couple of hundred bucks if he/she wants [but w8, do you even need a parttime cleaner for a 3xxsqft unit??]. To further proof the point, the attached is the rental for this quarter and it is no surprise a D12 MM development called Prestige Height can even shoot up to the top 5 leader for this quarter. Reason being, the same logic as mentioned above. If you monitor the qtrly rental psf/mth for past few yrs, you will occasionally see newly top condos outside CCR areas like owen road [little india] hitting top 5 due to the demand for such smallish units but landlords charging a much higher psf/mth

For MM cap appreciations is based on quantum theory. Like you already mentioned these units already priced so high, getting cap appreciation will be hard unless the 1rm condos appreciate from 1.2mil to 1.4mil. MM at low quantum will still have room for growth as long as the price gap is huge enough. A 700K skysuites vs 1.15mil clift has a buffer of 400-450k in quantum, the choice is pretty obvious

[leesg123]

I think bro dtrax analysis makes sense. Possible mm to consider are the "Triple Gems" along river valley road: RV Suites, Stellar RV and RV Edge. But strictly speaking, if only consider those 3xx and 4xx sqft format and below 800k, RV Edge fits the bill. They all within walking dist to valley point, great world city and even orchard.


Mm at balestier still got sleazy image, those karaoke meimei loves to rent there.

[Ringo33]

Buying into CA MM will offer you good rental yield, however it will not have much potential for capital appreciation or future en bloc due to its high psf and unit size.

Personally I would rather buy a bigger unit with lower psf (<2000) that can still generate good (not fantastic) rental yield and then wait for capital appreciation through en bloc.

[leesg123]

Buying into CA MM will offer you good rental yield, however it will not have much potential for capital appreciation or future en bloc due to its high psf and unit size.

Personally I would rather buy a bigger unit with lower psf (<2000) that can still generate good (not fantastic) rental yield and then wait for capital appreciation through en bloc.

Land price will increase regardless of mm or big units.

Also, do remember there is this share value thing. A mm could jolly well be 1 or 2 less share compared to a much bigger unit (assuming the devlopment got mixed), this is part of the consideration (other than unit size) when spliting the enbloc money.

Also, enbloc is still many many years down the road, if mm can achieve double rental yield than the big unit, go figure out the $ collected and the compounding effect over 20 odd years.