• Victor Chua

TOP 5 Reasons Why You Should Buy Penrose

Updated: May 18, 2021

If you haven't already heard of the upcoming new launch that's the talk of the town in 2020, let's get straight to it - presenting the magnificent Penrose!

Overview


Penrose at Sims Drive is an up-and-coming residential development sitting on a total land area of 174,648sqft. It is located in Aljunied District 14, in the central region of Singapore. If you are still unsure of where it is exactly, it is just beside the Sims Urban Oasis condominium. Penrose is a joint venture project by 2 highly-established developers with superb track records of providing quality housing in their developments – Hong Leong Holdings Limited and City Developments Ltd (CDL).


Penrose consists of 5 blocks going as high as 18 storeys with a total of 566 residential units. Besides the usual ground-level communal facilities, there will also be roof facilities. In addition, there will be a childcare center in the development itself that will certainly entice parents with young kids! There are various types of units that you can choose, ranging from 1-bedroom units at 474sqft to 4-bedroom units at 1389sqft. Hence, this development caters to both investors looking for rental income or those looking for a home to reside, be it singles, couples or families.


Now, let’s delve into the 5 reasons why you should be putting your money into Penrose!



REASON 1: Location


The land parcel is strategically situated along the city fringe, making it a haven for owners and landlords. The location is so well-connected by expressways that residents only need approximately 3 minutes to drive to the KPE or PIE, allowing a smooth and fast drive to the Central Business District (CBD) with just a 6 minutes' drive to Paya Lebar Quarter (PLQ). Penrose is also conveniently located just 400m away from Aljunied MRT station which makes it about a 5 minutes' walk. Being so near to the MRT also means that you will be 5 stops away from Raffles Place and 1 stop from Paya Lebar. Lastly, there is also an extensive bus service located just along the road of Sims Drive. Residents will be spoiled for choice with the plethora of transport modes they can choose from daily.



It is thus extremely easy and convenient for residents to travel to their workplaces seamlessly. Having multiple workplaces nearby, especially with the upcoming major transformation happening at the Kallang and Paya Lebar Sub-Regional Centre both just 1 MRT stop away. A strong foreseeable influx of job opportunities will be created, which will further boost the strong demand and need for residential units in the area.


Additionally, with the wide variety of food options located around Penrose, residents will be able to explore the surrounding eateries within minutes. With over 50 vendors located at Sims Vista Market & Food Centre just within 3 minutes' walk away, residents will have the utmost privilege to fill their stomach with piping hot local cuisines freshly whipped up by our local chefs. Do you know that we are also within 8 minutes' drive to the Old Airport Road Food Centre?



For families with children, rest assured. We have Nexus International School, James Cook University Singapore, Geylang Methodist School (Primary and Secondary) and Canossa Catholic Primary School all located within 1km of the property.



REASON 2: Developer

City Developments Limited (CDL) and Hong Leong Holdings Limited are easily the most established developers in Singapore with a distinguished reputation in the industry for decades.


CDL is a leading global real-estate company with a network spanning 100 locations in 28 countries and regions having the reputation of being the second-largest property developer in Singapore with a proven track record of over 55 years in real estate development.


CDL's track record includes the mass market of its recently-launched Piermont Grand Executive Condominium, mixed commercial residential Sengkang Grand Residences, higher-end condominiums such as Amber Park and luxury developments such as Boulevard 88 and South Beach Residences.


Why is a reputable developer so important?


  • Quality of Finishes and Workmanship: Buyers rarely, if not at all, complain of a CDL project.

  • Assurance from a Big Brand name: In the sense that they will deliver what they promise in terms of product and expectations. They have a brand name to live up to.

  • Financial Capability: Early this year, some home buyers were left in the lurch after a developer went bankrupt. https://www.straitstimes.com/singapore/developer-goes-bust-court-ruling-provides-condo-buyers-relief Surely, you wouldn’t want to be in these buyers' shoes and see your hard-earned deposit money go down the drain.

  • Price Preservation: This, in my opinion, is the most important factor of all. We have seen in the past developers providing carrots (discounts) to buyers after 1 to 2 years from the launch dates and these prices are obviously lower than those who bought from Day 1. The worst case scenario is where developers rush to sell units closer to their TOP and offer highly-discounted prices. This will always leave a sour taste in the mouths of the very first buyers as they have incurred a “paper loss”. But, unlike big time developers, and together with the previous point on financial capabilities, they have strong holding power and are able to hold on to their prices; on the contrary, some of these developers even increase their prices instead. This in turn provides strong price preservation to buyers and the assurance that prices only go up and not down.



REASON 3: Growth Potential


Located within the city fringe, Penrose will be within minutes' drive to the CBD and the “New Growth Areas” (Bidadari Estate, Paya Lebar Sub-Regional Centre, transformation in Kallang, Marina Bay). Being so closely connected to these areas, the upside potential of Penrose is just uncomparable.


Let us take a look at the transactions of Park Place Residences located just beside Paya Lebar MRT and Paya Lebar Quarter. With over 17 transactions from 1 to 3-bedroom units rented just in the month of June ranging from $2500 to $4650, buyers who bought Park Place Residences during the initial launch actually hold the highest profit. Comparing the starting price of Park Place Residences at an average of about $16XX PSF, units were recently transacted at an average range of about $17XX-$18XX PSF in just 3 years! Owners of Park Place Residences can safely move on and continue with the upgrading of their property assets as they have ridden on this transformation which created an “Easy Exit Strategy” for them. This is a classic example of being close to transportation, amenities and a potential growth area.



Paya Lebar is just the tip of the iceberg, with all the other upscaling plans set in place for the “New Growth Areas”, be ready to see exponential growth around the region! With Penrose situated in the centre of this transformation, Penrose can be your equivalent or more of Park Place Residences.


Now, back to Penrose’s location: let us take a look at our neighbour, Sims Urban Oasis. Do you know that Sims Urban Oasis started out with an average pricing of $14XX PSF, and owners today are selling their unit at an average of $15XX PSF? Further study shows that from Aug 2019 to 18 May 2020 (latest transaction), which includes a total of 31 transactions, were all profitable with gains from $55,000 to $186,000. In June 2020, a staggering number of 27 transaction from 1 to 3-bedroom units were rented out in Sims Urban Oasis ranging from $2100 to $4000.


With Penrose being in the centre of all that, having all the “correct” attributes that investors are looking for, what will you do?

Furthermore, are you aware that there is an upcoming plan to transform Kallang into a vibrant precinct by 2025?


Major Transformation at Kallang. Kallang will be transformed into a vibrant location by 2025

By 2025, the area around Kallang will undergo a huge transformation. This will further enhance Kallang to be a destination for sports and world-class entertainment. In order to inject vibrancy into the area, 6 new developments will be built to complement the current Sports Hub. With all these plans set in place, there are huge opportunities and potential that investors will be able to reap from.



REASON 4: Right Entry Price



Comparative Market Analysis


I have selected a couple of projects around Penrose to do a quick price comparison.


New Launch Projects


Penrose

Land Bid : $732 PSF

Est. Breakeven : $1,264 PSF


*Assuming developers are looking at a 20% - 25% profit margin, I am guessing the PSF will be likely under $16XX PSF.


The Antares

Land Bid : $1,109 PSF

Est. Breakeven : $1,646 PSF


*The Antares is still selling on an average of $17XX PSF (with a profit margin of 10% - 15% for the developer)


Resale


Sims Urban Oasis

Land Bid : $687.9 PSF

Est. Breakeven : $1,153 PSF


*Sims Urban Oasis was launched on an avg of $14XX PSF (with a profit margin of 20% for the developer).


Tre Residences

Land Bid : $776

Est. Breakeven : $1,256


*Tre Residences was launched on an avg of $15XX PSF (with a profit margin of 25% for the developer).


Do you know that the recent transaction in Sims Urban Oasis and Tre Residences was sold as high as $1605 PSF and $1715 PSF respectively? At the same time, The Antares, a new launch project, is being sold at an average of $17XX PSF.


With an attractive land bid price of $383.5 million, or $732 PSF per plot ratio for Penrose, I would say a rough estimation of the breakeven pricing might land us reasonably at a range of $15XX - $16XX and a profit margin of 20-25% for the developers. If the expected price is realised, this will definitely be a steal, as this new launch price is standing on par with the surrounding resale condominiums' pricing. As the latest hot topic in town, Penrose is indeed an attention-seeking project which has accumulated a lot of hype, simply because of the fact that it is likely going to be set at a right pricing to enter for investors. It is definitely an uncommon sight to see a newly-launched project with an likely estimated price lower than the surrounding resale condominiums.


For my dear friends and investors who have seen or heard about Parc Esta previously, you should seriously consider Penrose if you didn’t manage to get your hands on Parc Esta. Parc Esta has reached a status of 94% (1329) of units sold since it was available just over a year and a half ago.


  1. Lowest land cost advantage = higher possibility for lowest entry price.

  2. Lowest risk for a city fringe project with such entry price (pricing that you are likely to see outside of the central region).



REASON 5: “Guaranteed to make money”


I cannot speak for everyone when I say this, but I know that every savvy buyer or investor wants to make a profitable investment, especially in a property that can create a huge leap in your asset progression. So, the only way to prove my point is to show you the facts and figures. I would like to bring up an example: the development located just beside, Sims Urban Oasis that shares similar attributes to Penrose.


Before we go into that, let me show you something interesting if, after reading up to this point, you are still undecided over District 14.

This chart clearly shows that District 14 is the fastest-growing district with a phenomenal growth of 133% in a 10-year span followed by District 13 at 79% and District 15 at 45%. Why is this so? The transformation for District 14 has been vast, referring to the points mentioned under Growth Potential together with what is going to happen in the future.


Secondly, looking at the performance of Sims Urban Oasis, we have seen many owners pocketing decent profits and 1 at almost close to $150,000 just by holding for just 3 years. Sims Urban Oasis was launched in 2015 and back then, many buyers had the same skepticism as of District 14, like upsides, but those who believed in the facts made their pot of gold. Moving on with Penrose, with the odds in your favour and the facts and figures presented to you, I will leave it to you to answer whether you can make money in Penrose. Your odds are as good as ours but for us, we take calculated, quantitative bets.



Summary


To all my dear friends and buyers, if you didn’t manage to capture the information above, let me just quickly summarise why you should consider Penrose.


  1. Location

  2. Developer

  3. Growth Potential

  4. Right Entry Price

  5. "Guaranteed to Make Money"


What are your concerns? What would you wish to share or clarify? I would love to hear from you!


For more property insights,

Read More @ https://www.victorchua.com/blog

 

Victor Chua, Senior Associate Director of OrangeTee & Tie, is a up and rising leader making a stand in the real estate industry.

He enjoys working out during his free time and can sing a couple of songs decently without having any leftover food thrown at him. When not doing so, he enjoys spending time with his family and love ones as he sees family as his top priority.

Professionally, he is a licensed real estate agent, investor, team leader, and a Real Estate Salesperson (RES) trainer in Navis Living Group (NLG).

Throughout his career, he has helped many clients grow their wealth through meticulous and intentional real estate planning by selecting great property investments and also managing their portfolios actively.

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