Alexandra Central, an upcoming hotel-mall near Ikea, hopes to draw business and leisure tourists, as well as nearby residents and office workers.

By Stella Thng

Halfway through cooking, you realise you’ve run out of fresh mushrooms. You switch off the stove, take the lift down and pop into the supermarket downstairs, and you’re back within minutes to continue making dinner.

That’s the beauty of living in mixed developments in the context of private housing, points out Jay Lee, senior division director from SLP Scotia. “Mixed development offers a very unique proposition to a pure residential development, which is the convenience of getting groceries, food or other items, especially when you need it urgently.”

It’s not a new concept. From the 1976-built International Plaza and the high-end The Orchard Residences at the Ion Orchard mall, to heartland projects such as The Centris atop Jurong Point – the first mixed development in the West – and the upcoming Watertown in Punggol and The Hillier at Hillview, local property punters have long embraced the idea of mixed developments.

While many homeowners who bought popular projects like the convenience and comfort, not everyone gives it the thumbs-up. “Having a mall downstairs may be convenient, but it also means that strangers will be walking around my home,” says Leon Neo, 45, who checked out several mixed developments before deciding to buy a regular condo. “Besides the security issue, I also don’t want my teenage kids to loiter around the shops after school every day.”

Investors who buy residential units are attracted to the potential rental and capital yield. Having amenities such as a supermarket, food-and- beverage outlets – no need to cook! – beauty salons and fashion stores make it much more attractive to tenants than just a regular apartment.

Some prefer to invest in the retail stores; according to Square Foot Research reports, commercial units in a mixed-development project can be let out at up to five times the per-square-foot price of the residential units.

Besides residential-retail mixed developments, investors trying to avoid paying the 7 per cent Additional Buyer’s Stamp Duty for their second residential property (10 per cent for third and subsequent residential property; Singapore PRs pay 5 per cent and 10 per cent for their first and second home respectively, while foreigners pay 15 per cent for any residential purchase) have been shopping for non-residential mixed developments such as office-malls or hotel-malls. We check out new developments that cater to different needs:

BUYING A FAMILY HOME
Expected to be completed in 2017, Nine Residences is the first mixed development at Yishun, offering 186 units ranging from one to five-bedders. It comes with all the usual of the two-storey Junction Nine mall at your doorstep. “Buyers of the condo are a good mix of end-users and investors,” says Joanne Goh, senior manager of marketing and business development at CEL Development.

Owner-occupants are attracted to its accessibility to Yishun MRT station and nearby Seletar expressway (SLE), schools such as Chong Fu Primary School within 1km, several secondary schools and Yishun Junior College nearby. Other amenities include Northpoint Shopping Centre, Yishun Public Library, Khoo Teck Puat Hospital, Lower Seletar Reservoir Park and even Safra Yishun and Orchid Country Club for golfers.

Those looking to let out their apartments are eyeing expats who work at the Seletar Aerospace Hub; the nearby GEMS International School is another draw. Over 65 per cent of the condo have been sold out, including the one- and five-bedder units. Prices start from $720,619 for a 549sqf 1+study and $1.205 million for a 1,173sqf four-bedder.

Investors in Junction Nine, which offers 129 retail shops and 17 restaurants ranging from $3,000 to $5,500psf, are banking on the ready and future pool of consumers in the rapidly growing Yishun township. Anchor tenants include Sheng Siong supermarket and a foodcourt.

“Mixed developments offer convenience to the ever-busy Singaporeans,” sums up Joanne about its appeal. For example, working mums too busy to cook can count on a variety of F&B outlets just downstairs, or even get their beauty fix.

Also check out: Resale units at The Centris and Thomson Imperial Court, which has a Sheng Siong supermarket in its basement. Or consider new projects such as Watertown at Punggol, with six floors of shops and 992 residential units when it’s ready end-2017, or NEWest at West Coast Drive, a 136-residential unit property with over a hundred retail shops, restaurants and a supermarket, due to be completed end-2018.

INVESTING IN A RESIDENTIAL UNIT FOR RENTAL AND CAPITAL YIELD
Le Regal is one of the few projects in Geylang with a bigger site area, which allows the developer, Fragrance Realty, to build full condo facilities (except a tennis court) and three levels of basement parking. Drivers will appreciate its close proximity to major expressways such as the Pan-Island Expressway, Central Expressway and Kallang-Paya Lebar Expressway.

Also attractive to tenants is its city-fringe location in Geylang Road, near enough to the Central Business District but much more affordable than renting in town. It’s an eight-minute walk to Aljunied MRT station, one stop away from the Paya Lebar commercial hub where many expats (and potential tenants) work.

“Demand from expatriates will continue in this area, especially for this rental price range which is expected to be about $2,500 for a one-bedroom penthouse and $3,500 for a two-bedroom penthouse,” predicts Jay, who is marketing this competitively priced project. For example, a 689sqf penthouse is marketed at $699,000, with an expected rental yield of 4.3 per cent. “This is considered high in today’s market, especially since it’s a freehold property in an excellent location,” adds Jay.

Due to be completed in 2016, there are 88 residential units and the last 18 penthouses were recently launched with a show flat in Kampong Java Road. All 48 commercial shops have been snapped up. Most buyers are investors, though Jay also spots young couples buying the residential units. “The prices are very affordable for young couples who can also treat it as their first property investment,” he says.

Also check out: Older and more affordable projects such as Sunshine Plaza and Burlington Square. Tenants tend to prefer properties in town or near the city fringe for an easy commute to work. For newer (and more prestigious) addresses, consider the upcoming Eon Shenton, a 32-storey mix of shops, offices and residences in the CBD ready in 2019, or the mega Marina One Residences behind the Marina Bay Financial Centre, with two towers of homes (1,042 units) and another two towers of commercial space.

INVESTING IN A COMMERCIAL PROPERTY
Just around the corner from Ikea, Alexandra Central is a new hotel-mall built on the old Bukit Merah Safra site. Developed by CEL-Alexandra, a subsidiary of Chip Eng Seng Corporation, it consists of the 450-room, four-star Park Hotel, and three storeys of 85 retail shops and 31 F&B restaurants.

Investor Bobby Kok, who has bought units in the mall due to be completed in 2016, sees great potential in the prized location. “It’s in a highly populated area with a natural crowd from hotel guests, Ikea, Queenstown

Shopping Centre, many office buildings, condos and even customers who visit the motor workshops nearby,” analyses Bobby, who likes the unique hotel and shopping mix on the iconic old Safra plot.
 

INVESTING IN A COMMERCIAL PROPERTY
Alexandra Central also targets business travellers, with its close proximity to nearby business parks such as Biopolis, Fusionopolis, the Singapore Science Park and the Mapletree Business City; medical tourists to Singapore General Hospital and National University Hospital, and visiting foreign academics to the National University of Singapore, Singapore Polytechnic and Ngee Ann Polytechnic. Being easily accessible to tourist attractions such as Orchard Road, Mount Faber, Vivocity and Sentosa may also draw tourists.

Another big plus for investors – the 99-year leasehold property’s rare strata status, and the fact that it’s even available for purchase; most malls in Singapore are owned by big boys such as Capitaland or Mapletree who lease out shops to businesses.

To date, 97 per cent have been sold mainly to businessmen for their own use or investors such as Bobby. Recent transactions were between $4,225 to $6,734psf. It isn’t cheap, but “it’s a fantastic catchment of business tourists, holiday tourists and local shoppers,” says Bobby. “Also, most, if not all, retail and F&B outlets in mixed developments are always in high demand and fetch higher rental returns than residential properties,” adds the savvy investor, who has been focusing on commercial rather than residential units in recent years.

Also check out: Royal Square at Novena, a 33-storey complex of hotel rooms, medical suites, retail shops and F&B outlets centrally located in the future Novena Health City.

CONSIDER THE PROS & CONS
PROS
■The convenience of coming home to retail therapy: Having a supermarket, shops and eateries so near home saves you the trouble of lugging around heavy grocery bags – or even the hassle of cooking.
■ They’re more attractive to tenants: Should you intend to let out your home some day, it’s comforting to know that tenants usually like the convenience of a mixed development and may be willing to shell out more for rental.
■ Savings on transport costs: Shopping is a free walk away so you save on petrol, parking or public-transport costs.

CONS
■ Expect more noise and possible lack of privacy: This is inevitable as shops will definitely draw crowds and noise, though most mixed developments have separate lift lobbies for shops and residences. Look out for the occasional confused shopper who might stray into the residential side.
■ Possible parking woes: Depends on how limited parking is at your condo, whether parking is free for shoppers, and how efficiently they’ve been demarcated for residents and shoppers. There’s a mixed development in Robertson Quay that offers very limited free parking. The security guard only lets customers of the F&B outlets park, and is very strict about that.
■ They cost more: Generally, units in mixed developments cost more than a regular condo. For example, units at The Centris are currently being marketed at between $1,250 to $1,4000psf, compared to $1,100 to $1,300psf at the nearby “regular” Lakeshore condominium.