Are there any positive impacts from the City Gate development as it makes its debut in the Beach Road area?

With the shortage of newer private residential launches, coupled with the ongoing government plans to introduce more vibrancy around the Beach Road area, there has been growing interest among investors who are starting to notice the various development potential offered in the area. In this article, we will be analysing the impact of upcoming new developments such as CityGate (slated to TOP in 2018) and the future outlook of the property market in general along the Beach Road area.

What makes City Gate appealing?

Proximity to public transportation: The development is conveniently located within a few minutes’ walk to three MRT stations: Nicoll Highway MRT, Lavender MRT and Bugis MRTstations.

Plans to develop Beach Road area into a vibrant district: Under the Urban Redevelopment Authority (URA) Master Plan 2014, the Beach Road area is expected to be redeveloped into a office, hotel and convention hub as part of the ongoing development of the Marina area. A map extract from URA illustrating the plans is as follows:

Source: Urban Redevelopment Authority (URA) Master Plan 2014

As readers might note, the area surrounding Beach Road, and Rochor Road are being slated for conservation zones as part of the Kampong Glam and Beach Road redevelopments (circled in orange colour). There are plans to introduce ‘green’ spaces which will be extended through the buildings into roof gardens, sky terraces and balconies. Residents around the area who desire nature might welcome such changes to the area. There could also be potential property price appreciation in the future if more commercial setups start to move into the area and provide additional employment opportunities to the residents living close to Beach Road and other places around the Central Business District (CBD) area.

How will the addition of CityGate help to enhance property values along Beach Road area?

For a long while, there has been an expansion of land being developed around the Beach Road area in order to cater to the demand for office space. However, in order to satisfy the needs of office workers seeking newer developments that are close to the CBD area, older developments such as Golden Mile Complex along the Beach Road area are undersupplied, and unable to match their need for quality living spaces. Given the huge demand for newer private residential developments, developers are starting to capitalise on the potential opportunities by redeveloping or converting their existing office developments for mixed-use purposes. As more ‘Grade A’ type office spaces come on stream, the loss of smaller office spaces like the Keypoint building which City Gate will be replacing with, is unlikely to make much difference.

Moreover, the City Gate development is expected to provide some form of a district renewal around the Beach Road area. Other potential selling points could be the various plans to redevelop the area, the proximity to work places, and other recreation places such as Sports Hub in Kallang, Orchard Road shopping district, among others.. The various new private residential developments might also provide some impetus for existing landlords in the relatively older developments to start thinking about building enhancement initiatives in order to retain existing tenants or to attract newer ones.

As for the comparison against mixed-use developments with monthly residential transactions around City Gate area from June 2013 to month-to-date (MTD), they are as follows:

Source: Singapore Property Watch (SPW), Urban Redevelopment Authority (URA)

Based on the above table, and a check on the website of ST Property (as of 23 June, 2014) indicated some of the asking prices for the City Gate development fall in the area of $1.2 million to $1.4 million for a floor area of 500 sq ft to 700 sq ft respectively. This translates to approximately $2,000 per square feet (psf) to $2,100 psf. When compared to Duo Residences ($2,000 to $2,100 psf), the City Gate development appears to be quite fairly priced. Duo Residences is a joint development between Malaysia’s Kazanah National Berhad, and Singapore’s Temasek Holdings.

Beach Road is also expected to see more exciting mixed-use developments such as South Beach Tower, which is owned by City Developments Limited (CDL). The completion of the development is expected to be towards the end of 2014 or in the first half of 2015 (1H 2015).

Summary
The upcoming City Gate development is expected to provide residents with greater residential and entertainment choices that are conveniently located within the town area. With the government planning to rejuvenate the Beach Road area, we believe that there could be more opportunities for buyers and investors to look into when considering their preferred residential choices around the Beach Road area.

Source: ST Property 27th June 2014

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Are there any positive impacts from the City Gate development as it makes its debut in the Beach Road area?

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