Are Integrated Development Condos in Singapore Worth Buying?
Every now and then, modern life raises the perennial question: Which is better? Having more money or having more time?
Sometimes – though rarely – it’s possible to have both. For instance, there are residential properties in Singapore offering both long-term growth potential and right-at-your-doorstep levels of convenience that save dwellers plenty of time and trouble.
Known as integrated developments, these residential-commercial hybrids are essentially all-in-one private dwellings that promise urban liveability and passive income generation to occupiers as well as investors, respectively.
Supposing that you’ve got your eye on a home within an integrated development, the question then becomes, should you buy it? Here’s an explainer that could help you arrive at a decision.
What are integrated developments?
When it comes to the history of integrated developments in Singapore, one local town is closely tied to their past: Sengkang.
Beginning life as home to a humble fishing village in the swamps, Sengkang remained largely unmodernised until 1995 when a new plan was announced to take it from tranquil riverside kampong to bustling new town.
Conceived as an integrated town centre, Sengkang’s transformation saw the construction of an inter/intra-neighbourhood transport hub comprised of MRT/LRT lines, a bus interchange, as well as a shopping centre (Compass One), all of which are housed or connected within the same development.
But chief of all is Compass Heights – the residential condo component of Singapore’s first-ever integrated development, which was completed in 2002.
Since then, Singapore has seen integrated developments popping up in almost every corner of the island.
Examples include DUO Residences in Bugis, Watertown in Punggol, as well as Bedok Residences in Bedok, where residents don’t have to travel far for access to neighbourhood amenities and public transport options.
So, to boil it down, what exactly are integrated developments? In essence, they’re all-in-one property projects with the following features:
A residential component (typically private, though not always).
A large-scale commercial element (i.e., a shopping mall).
A direct connection to a transport hub (i.e., a bus interchange and/or MRT train line).
How well do integrated development homes perform?
Considering all the characteristics mentioned above, convenience is a key driving factor for savvy homebuyers wanting to purchase a unit in an integrated development. That said, there are other positive aspects that strongly support the case for buying one too.
Generally, integrated developments in Singapore have seen real estate success due to their attractiveness – both as residential and investment buys – even years after their initial arrival on the local property scene.
DUO Residences in Bugis saw an 87% take up rate for its units (468 out of 540) sold within three days of its launch in 2013. Subsequently, earlier in October this year, one of its penthouses was sold for a $2.1M profit, marking it as “the most profitable resale transaction resale transaction recorded” for the project.
Likewise, a success story can be told about Watertown in Punggol, which debuted back in 2012 to great fanfare. With 748 out of 992 units sold during the first month of its launch, Watertown has since seen average per square foot (psf) values rise from $1,178 to $1,469 across the last decade – and even a high of $1,654 in 2013.
Furthermore, since integrated developments are rarer than their non-landed private home counterparts and are sited at desirable locations, the signs do indeed point towards being attractive buys not just owner-occupiers, but also those who are keen on having a reliable source of passive income.
But as the expression goes, the proof is in the pudding. Here’s a closer look at how the indicative rental averages of integrated developments in Singapore fare against the norm:
(*All data shown are based on figures available on EdgeProp Squarefoot Research – Trends and Analysis at time of writing.)
Based on the figures shown above, it can be inferred that homes in integrated developments are likely to do better than their non-landed residential counterparts within the same age band and district when it comes to generating passive income from rent.
Integrated developments in the Core Central Region (CCR) are also more likely to perform better compared to those in the Outside Central and Rest of Central Regions (OCR and RCR) of Singapore.
CCR highlights that have performed noticeably better vis-à-vis their respective district’s indicative monthly rent for non-landed properties of similar age include The Orchard Residences ($8.02 psf/month VS $4.71 psf/month) as well as Wallich Residence ($9.88 psf/month VS $6.94 psf/month).
To sum up
From a liveability perspective, condos in integrated developments are almost certainly worthwhile buys, especially for owner-occupiers who prize convenience highly on their list of must-haves in a home. The same can be said for real estate investors who are on the hunt for premium properties with higher-than-usual rental rates as well.
Seamless connectivity with public transport options, access to retail options in minutes, plus good potential for passive income generation. What else can one ask for, really?
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