• Joshua Loo

Review: Marina One Residences, Huge Potential for Land Development in the Central Core Region

Updated: Sep 3

Introduction


Owning a property in the Central Core Region (CCR) of Singapore will no doubt bring about wows from other real estate investors. After all, these can be considered the crème de la crème of all the properties around the world, let alone Singapore.


With its highly attractive rental yield, many investors have no doubt seek to invest in these properties to bolster their real estate portfolio. These advantages might be held back by its drawbacks however, where one such reason is its susceptibility to a capital loss in financially challenging times. For long-term investors however, this is simply a paper loss and it all goes back to your ability to pick a fantastic investment property that is able to hold its value due it its merits.


This article mainly revolves around an exciting development that we believe that you should consider investing in. What makes Marina One Residences highly unique is that although it is in the CCR, there are still plenty of development opportunities in the surrounding area, which is backed by the Master Plan 2019.


UPDATE: As of 3rd September 2020, Marina One Residences have sold up to 84.64% of its 1042 units. 91 units are available for purchase, direct from the developers.

What Makes it Attractive?


Good Volume of Transactions in Certain Years



During the initial launch of Marina One Residences in 2014, a huge majority of sales volume for condominiums around District One was taken up by Marina One Residences (287 units), in the later years however sales have declined because developer M+S Pte Ltd made a strategic move to maximize its profits by withholding half of it 1,042 residential units and releasing it for sale in 2018. This might have resulted in certain choice units not being made available to savvy investors, who would have waited.


From the sales transaction trend above, take note of the increase in average PSF from $2,243 in 2014 to $2,331 in 2020. The fluctuation in PSF can be explained by analyzing the caveats below. Unit numbers have been removed to protect the privacy of the property owners.


Marina One Residences Subsale + Resale Jan 2014 - Dec 2018


Marina One Residences Subsale + Resale Jan 2018 - Apr 2020

The drop from $2,541 in 2018 to $2,331 in 2020 could have resulted from downward pressure on pricing was caused by many Marina One Residences units being made available in the open market. Take note on the caveat from Jan 2018 to Apr 2020, which shows that there are almost 130 units made available in the open market, this is due to property flippers who are keen on realizing their paper gains.


This has shown that from 2018 to 2020, volume for Marina One Residences was averaging half of total transactions in District One. Which are good numbers for post-launch/pre-TOP developments. This reflects that Marina One Residences is still met with good demand despite its high entry price.


UPDATE (03 Sep 2020): There has been recent downward pressure on Marina One Residences due to the release of new launches in the D07, Bugis/beach road district. D07 is undergoing constant rejuvenation, which places an additional premium above older resale properties. Increased marketing in D07 also results in more attention towards that area. I believe that this pressure on Marina One Residences will be relieved in the near future when new commercial developments start launching within the Marina Bay area.


Why are people still buying into Marina One Residences? Let me explain in the following points below.

Business Improvement District (BID)


Purchasing a property in an area with little development can be a very harrowing experience, even for seasoned investors. However, one should look further into its future potential to truly appreciate its value. This might be a reason to why some investors might refrain from investing in Marina One Residences.


Marina One Residences is a new launch property that is able to beat the odds. In other countries where properties with very little surrounding developments are being built on, the land is a resource that is already present. Therefore, there is a lower entry towards building on it, and passing the costs on to the consumer.


In Singapore, are you aware that Marina Bay is sitting on reclaimed land? This means that the land here was not present up until the 1990s, when the project was completed. Funds were used by the Singapore government for the purchase of foreign sand. With this, the government is required to make this land a success, if not, it will be a catastrophic failure!


Land is a precious resource in Singapore, and if it is not well utilized, it acts as a choke to the economy. This brings us to our next point on BIDs.


BIDs are areas in which its stakeholders are given control to operate independently and improve upon to ensure that businesses residing on that land will thrive and remain relevant. This helps to revitalize areas with less footfall, which the government might have little interest in. Here is an example in which how the Singapore River Precinct was revitalized, in which the BID was implemented in 2012.

In the first year as a pilot BID, the range of many festivals and activities and physical enhancements have helped to increase the visitor count by 11%, from 1.3 in 2017 to 1.4 million in 2018*

*Independent research by Asia Insight in May 2018


The BIDs will indirectly have an impact on residential properties in which is residing close. As seen in the rental transaction trend above, take note of the increase in rental volume which is contributed by these revitalized commercial areas.


Marina One Residences is marked in the Master Plan 2019 by the blue blip. Surrounding it are white zones. These are areas intended to be used mainly for commercial, hotel, residential, sports & recreational and other compatible uses, or a combination of two or more such uses as a mixed development.


These white zones will be managed by the precinct stakeholders mentioned below.


Precinct Stakeholders

• Hong Kong Land, Keppel REIT, Suntec REIT, DBS, Raffles Quay Asset Management: One Raffles Quay and Marina Bay Financial Centre

M+S: Marina One

• OUE Commercial REIT: OUE Bayfront

• Sino Land Company Ltd: The Fullerton Heritage

This shows that there is a huge store of value that is not fully realized within Marina One Residences, which will be unlocked upon complete development of the area.


For more information, check out their website at Marina Bay Alliance


Excellent Connectivity



Being in close proximity to public transportation is a critical factor for tenants. Marina One Residences is flanked by four MRT stations, which are on different lines. With DT 17 (Downtown Line), NS27 (North-South Line), CE2 (Circle Line), and TE20 (Thomson-East Coast Line) in close proximity, this will be a choice pick for tenants.


Walking and cycling will be the choice modes to move around with shaded walks and dedicated cycling paths. This will serve to be a quiet respite from the bustle of traffic in the Tanjong Pagar / Shenton precincts, while still providing unparalleled convenience.

Attractive Rental Pool/Yield

Based on the Master Plan 2019, further west of Marina One Residences is commercial areas that are marked in blue. These are office spaces in the Tanjong Pagar/Shenton region, which provides with huge tenant pool.


From the rental transaction trends as seen above, Marina One Residences draw a higher than average PSF as compared to District One condominiums.

Low Maintenance Fees


Surprisingly, the maintenance fees for Marina One Residences come in at a very affordable $17.69 per share. This is because of the reduced need to attach a carpark lot to every unit, which we will elaborate on in the following paragraph.


Drawback


The Unit does not come with a carpark lot


Marina One Residences do not have a carpark lot which comes with every unit sale. Owners will have to fork out $192.60 per month for the 1st car and $481.50 per month for every subsequent vehicle.


Future Construction Projects


Due to future development within the area, occupiers of the property might face issues in regards to construction around the premises, where there might be noise and air pollution contributing to its immediate surroundings.


Steeper Costs Compared to Other Residential Developments




Coming in at a higher PSF, this is a common practice by developers in order to turn a profit during launch. From 2018 onwards, prices for Marina One Residences have dipped closer to the average PSF of all condominiums in district one due to the availability of units in the open market.


Do note that the immediate areas around Marina One Residences have not been completely developed yet and therefore will provide more value to be realized in the future.

Mortgage Repayment Numbers


This price is on the 1 Bedroom + Study (753sqft) at $1,810,710.


The bank loan interest rate is currently based on fixed loan rates given at this point and is subjected to changes.



Other Reviews

KOPAR AT NEWTON

TREASURE AT TAMPINES

VERTICUS

PARC CENTRAL RESIDENCES



Are you keen on finding out if Marina One Residences is an ideal investment for your specific financial circumstance? Contact us at +65 96329840 or send your queries to estatemagnates@gmail.com! Our consultations do not have a charge, so let us assist you!


The views, thoughts, and opinions expressed in the text belong solely to the author, and not necessarily to the author’s employer, organization, committee, or other group or individual. The author does not accept any responsibility whatsoever for any harm or loss arising from accessing or relying on information contained in this blog post.

 

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