Parc Botannia sales to yield $57m profit

Parc Botannia at Fernvale Road is expected to be well received by buyers according to KGI Securities in its analyst report.

Parc Botannia is jointly developed by Sing Hong and Wee Hur with a shareholding interest of 70-30. With a GFA of 555,288 sq ft, the project is estimated to yield a profit of $57m at $103 psf.

Parc Botannia is situated next to Thanggam LRT station and is easily accessible via the Tampines Expressway. The site enjoys close proximity to schools and amenities such as The Seletar Mall, eateries along Jalan Kayu, Sengkang Sports Centre and Sengkang Riverside Park. The purchase price of the land was $287m. Parc Botannia shall comprise 4 blocks of 22-storey buildings with about 735 apartment units. Construction is expected to commence in 2H2017.

Notwithstanding the weak property market in 2015, High Park Residences, which is located next to Parc Botannia, sold 1,399 units for an average of $988 psf within 20 months after launch. The average price for other nearby projects are around $970 to $1060 psf.

Excerpts from KGI’s analyst report:

Singapore property prices have declined for consecutive 15 quarters, with home prices lower by around 12% from their peak in 2013.

However, sentiments have started to improve lately, going by the increased transactions and slower decline of property prices in the last two quarters.

Singapore developers have sold a total of more than 7,000 private homes in the first seven months of 2017, a 50% YoY increase.

Going by the increased property transaction volume and slower property price decline, property prices may finally be able to start moving up again despite most of the property cooling measures still in place. New home sales year-to-date in Singapore has increased 50% YoY, while the pace of decline in private residential property prices has remained almost flat in 2017.

We have assumed an average selling price of S$1,000 psf compared to recent transactions around the area of $970 to 1060 psf.