Swanky new facilities at Jurong Lake District will turn area into top commercial hub

The property market might have slowed in recent months, but for home hunters seeking good-value, long-term investments, there is one suburban estate screaming for attention: Jurong.

Jurong’s rejuvenation involves the building of new waterways, 1,000 private homes and 2,800 hotel rooms, as well as the addition of 500,000 sq m of office space and 250,000 of retail space. — PHOTO: URA

The Housing Board (HDB) town in the western region of Singapore might conjure up images of sprawling factories and sleepy suburbia, but in 10 to 15 years’ time, it will undergo a transformation that could propel the estate to the forefront of the suburban property market, say industry experts.

Last week, National Development Minister Mah Bow Tan unveiled an ambitious blueprint to transform Jurong into Singapore’s only lakeside destination: the Jurong Lake District.

It is set to become the largest commercial hub outside the Central Business District (CBD) – almost three times the size of Tampines, now Singapore’s biggest suburban commercial hub.

Jurong’s rejuvenation involves the building of new waterways, 1,000 private homes and 2,800 hotel rooms, as well as the addition of 500,000 sq m of office space and 250,000 of retail space.

The Jurong Lake District, which at 360ha will rival Marina Bay in size, consists of two precincts: Jurong Gateway and Lakeside.

The 70ha Jurong Gateway will boast swanky new high-rise offices, condos and entertainment facilities, all within walking distance of the Jurong East MRT station.

Lakeside is being marketed as a unique lakeside destination that will offer water activities and many tourist attractions, including a first-class science centre. It will be located around the Chinese Garden and Lakeside MRT stations, and will target young families.

In the short term, market watchers say Jurong is unlikely to see ‘exceptional boosts to prices’, given the current lacklustre market sentiment.

‘Plans are still at a very early stage, and it’s difficult to predict exact figures for future increases in property values when many factors are at play,’ said Colliers International’s director of research and consultancy, Ms Tay Huey Ying. But in the long term, property prices in Jurong could match those in established suburban towns such as Bishan and Ang Mo Kio, she added.

With or without the newly announced plans, private condos in Jurong – such as Parc Vista, Parc Oasis, The Mayfair and The Lakeshore – have seen price increases of 50 to 60 per cent since 2005.

The home investor can get attractive rental yields at some properties such as those within walking distance of MRT stations.

For example, units at The Mayfair, completed in 2000, and Parc Oasis, completed in 1994, sold for a median price of $560 per sq ft (psf) between the middle of last year and March this year.

Both developments are near the Chinese Garden MRT station.

With monthly rentals averaging $2.70 psf, owners enjoy rental yields of 5 per cent, said Ms Tay.

Units at newer condos near the Lakeside MRT station such as The Lakeshore, completed last year, went for a median price of $730 psf. They commanded monthly rents of $4 psf, providing an attractive average yield of 5.8 per cent.

The director of marketing and business development at Savills Singapore, Mr Ku Swee Yong, noted that prices at The Lakeshore jumped 40 per cent to around $803 psf on average in the first quarter of this year compared with the first quarter of last year – driven no doubt by the buoyant market last year.

In view of rising inflation and declining interest rates, Ms Tay said properties in the Jurong Lake District area present ‘relatively attractive investments’, as they cater to a niche leasing market, made up of foreign white-collar professionals who work at the International Business Park.

Other choices for investors include private apartments such as the former Housing and Urban Development Company estate Ivory Heights – just a stone’s throw from the Jurong East MRT station – and executive condos such as Westmere and Summervale.

The huge catchment of standard HDB homes surrounding the district adds to the broad range of properties available.

Prices of HDB homes at Jurong East have also risen, with executive units selling for a median price of $490,000 in the fourth quarter of last year, up from $468,000 in the previous quarter.

PropNex chief executive Mohamed Ismail said activity in the HDB segment, unlike that in the high-end residential market, is still very healthy.

Jurong East public flats have strong potential upside. For instance, a five-room flat in Jurong East now costs, on average, $90,000 less than one in Bishan and $135,000 less than one in Toa Payoh.

‘I expect prices for public housing to increase 5 to 10 per cent in the next two years,’ said Mr Ismail.

Leaning on the side of caution, the director of consultancy and research at Knight Frank, Mr Nicholas Mak, said property values will start to appreciate only when the Lake District plans materialise, which could take many years.

Government land is the most likely to go up in value, he said. If plot ratios go up, prices will also increase.

Because little of the land in the precinct is freehold, Mr Mak thinks it is unlikely that high-end private homes will be built in the area.

One likely investor, Mr Ivan Koh, 27, who works in a law firm, said the area has now emerged at the ‘top of the list’ for his property hunting. ‘There are still other factors to consider,’ he said. ‘But at least, there is some security if I choose to invest in a home in Jurong, as I know there are big redevelopment plans there.’

Source : Sunday Times – 13 Apr 2008