CDL to launch The Myst at Upp Bukit Timah in 2H2023; impact of cooling measures on residential portfolio 'manageable'

May 19, 2023

CDL to launch The Myst, a 408-unit project at Upper Bukit Timah Road, in 2H2023 (Picture: CDL)

Singapore-listed property group City Developments Ltd (CDL) announced on May 19 that it would launch The Myst, a new 99-year leasehold, 408-unit project at Upper Bukit Timah Road sometime in 2H 2023. The private condo is within a five-minute walk of the Cashew MRT station on the Downtown Line.

On the other hand, CDL has rescheduled the preview for Newport Residences, initially slated for April 29. The freehold, 246-unit Newport Residences is part of a mixed-use development that includes offices, serviced apartments and F&B and retail. It's a redevelopment of the former Fuji Xerox Towers commercial building on Anson Road in Tanjong Pagar in District 2 of the Core Central Region (CCR).

CDL deferred the preview following the rollout of the latest round of property cooling measures that came into effect on April 27, 2003. The additional buyer's stamp duty (ABSD) for foreigners buying residential property doubled from 30% to 60%. The ABSD for Singapore citizens buying their second and third or subsequent residential property increased to 20% and 30%, respectively, while that of Singapore Permanent Residents (PRs) increased to 30% and 35%, respectively.

"The Group will monitor the market conditions closely and launch the project [Newport Residences] at the appropriate time," says CDL.

‘Minimal impact’ on mass and mid-tier segments

In the near term, CDL expects the latest property cooling measures to impact projects with a higher proportion of foreign demand, typically high-end/luxury properties in prime districts or CCR.

The group expects "minimal impact" on the mass and mid-tier segments where most buyers are locals and PRs, as evidenced by the launch of EL Development's Blossoms By The Park at one-north, where 75% of 275 units sold on the first day of launch on April 29 at an average price of $2,423 psf. The launch of the 816-unit, freehold The Continuum by Hoi Hup and Sunway Property the following weekend saw 211 units sold (26%) at an average price of $2,730 psf. Meanwhile, the 732-unit The Reserve Residences at Jalan Anak Bukit, by a joint venture between Far East Organization and Sino Group, will launch on May 27.

Analyst at RHB, Vijay Natarajan, notes in his report on May 19 that the impact of the cooling measures on CDL's residential portfolio "is manageable", as the group has sold 88% of its launched inventory in Singapore as of April.

Natarajan estimates the group could recognise about $5 billion in unbilled residential sales over the next three years. CDL has four projects with about 1,500 units ($2 billion in gross development value) in the launch pipeline. He says that 80% of the unsold units are in the mid-tier and mass-market segments, less impacted by the latest cooling measures aimed mainly at foreigners and investors.

"While we expect a slight moderation in new launch prices post measures, margins are unlikely to see significant compressions and remain in an 8-20% range," says Natarajan in his report.

The group has residential developments in Australia too. As of 1Q2023, construction of the 198-unit The Marker in West Melbourne has been completed. To date, it is 92% sold. The 60-unit apartment project, Fitzroy Fitzroy, in Melbourne, is 40% presold ahead of its completion in 1Q2024. In Brisbane, its 215-unit Brickworks Park is 49% presold. The 97-unit Treetops at Kenmore, a JV project in Brisbane, is also 49% presold.

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