Newton Lodge, a 16-unit collective sale site at Newton Road, has been launched for sale by sole marketing agent, JLL.
Newton Lodge is conveniently located some 400 meters from the Novena MRT station and the Novena commercial cluster. Major developments around the Novena area have been underway, as the government targets to transform the area into Singapore’s largest healthcare hub by 2030. When completed, Health City Novena, spanning across 17 hectares, is said form an entire ecosystem revolving around health services, medical research and education, integrated with commercial, leisure and public community spaces.
The freehold 21,409 sqft site is zoned ‘Residential’ in the 2014 Master Plan with an allowable gross plot ratio (“GPR”) of 1.4. The property may be redeveloped into a low-rise apartment project comprising of up to 27 units with an average size of 100 sqm per unit. Subject to approval from the authorities, Newton Lodge may also be suitable as serviced residences or a custom-built co-living development. If approved for serviced apartments, Newton Lodge could potentially house around 50 to 60 rooms which could be rented for a minimum seven-day stay.
“Co-living, a contemporary form of shared housing, is more commonly found in cities such as Hong Kong, China, India and the US, catering to young and mobile occupants. It provides an affordable, high-density living solution with shared and modern spaces that bring together like-minded individuals. Co-living spaces appeal to single, young professionals who are looking for freedom, flexibility and a community,” said Mr Karamjit Singh, Senior Consultant at JLL.
“The concept of sharing private and HDB apartments with unrelated tenants is common in Singapore, which is informally a form of co-living. However, professionally-run and organized co-living concepts to the levels of the co-working phenomenon is still in its infancy stage in Singapore, and is expected to grow especially with high stamp duties payable for home purchases by foreigners in Singapore,” added Mr Singh.
“Purchasers who wish to develop an entire building for co-living spaces or short-term accommodation should find Newton Lodge’s central location, project size and price quantum attractive. Not only would a boutique-sized project be more manageable, a smaller community of like-minded residents may also result in more meaningful social engagements,” adds Mr Singh.
The vendors are expecting a minimum of $44 million for Newton Lodge, which reflects a land rate of $1,468 psf ppr at GPR 1.4.
Should the purchaser factor an additional 8 per cent bonus gross floor area for balconies and communal areas, the reserve price translates to a lower rate of approx. $1,359 psf ppr. Development charges are not payable for the redevelopment.
The tender for Newton Lodge closes on 26 February 2019 (Tuesday) at 2.30 p.m.
Mr Paul Ho, chief mortgage consultant of icompareloan.com, said the sale should be concluded with minimal delay and maximum benefit to the owners.
Collective sale process takes 20 to 30 months to complete and during this time, the owners typically do not have sufficient funds for down-payment and their CPF OA funds are tied up in the property, hence they cannot buy a new condominium early.
By the time the transaction is completed in 20 to 30 months later, the property prices would have already moved up 10 to 20 per cent. This is already evidenced by sellers of older estate asking higher prices. Hence if the process takes 20 months to 30 months, owners may need to consider the cost of a replacement unit by that time, else they may want to hold up a higher selling price.
Mr Ho pointed out that the rules are quite onerous and stringent and is governed by the Land Titles (Strata) Act – section 84A. Over the years, additions and amendments by the Ministry of Law to the en bloc law have made the collective sale rules even tighter.
He said that many of the home owners who refinanced their home loans to fixed rate home loans or those with 2 years locked-in or 3 years locked-in period will incur full home loan redemption penalty. This penalty is usually 1.5% of the loan amount. This tends to affect those who have bought their properties in recent years as their loan size tends to be bigger and their corresponding home loan redemption penalty higher.
Mr Ho suggested that if one’s home is at risk of en bloc, the owner could consider a home loan where there is no locked-in penalty, but instead entails a higher housing interest rate cost. The next best option is to look for packages with a waiver of locked-in penalty due to sale of property. Such owners may contact a mortgage broker to assist them to find such packages with waiver of locked-in penalty.
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