Singapore home buyers take a shine to mixed-use developments

SINGAPORE – A 710 sq ft two-bedroom condominium unit at mixed-use development Pasir Ris 8 was sold at $1.49 million – or $2,101 per sq ft (psf) – in November 2023. This was a price almost 37 per cent higher than the launch price in 2021.

In comparison, purely residential Bartley Vue, also launched in 2021, saw an overall 4.9 per cent increase in the median unit price for units of a similar size.

The Pasir Ris unit was the last two-bedder to go in the fully sold 99-year leasehold integrated development, one of a number of mixed-use projects that saw price hikes shortly after they were launched, checks by The Straits Times found.

ST looked at the sales transactions of 11 leasehold condominiums (five mixed-use, six purely residential) launched in 2021 across different districts and found that mixed-use developments generally saw stronger median unit price growth, compared with purely residential developments.

While mixed-use developments generally show strong price growth, some purely residential projects, such as The Reef at King’s Dock, a luxury seafront condominium in Harbourfront Avenue, posted an overall median price growth of 22 per cent, demonstrating that certain pure residential projects in a good location can outperform mixed-use developments. 

In the case of Pasir Ris 8, which is integrated into the recently opened Pasir Ris Mall, the two-bedroom unit sold in November 2023 recorded an increase of $564 psf, up from $1,537 psf at its launch in 2021.

There was such strong demand from the outset that the developer raised the selling price for the units six times in a single day during its launch weekend.

Ms Elaine Chang, who is in her 40s, paid $1.7 million for a three-bedroom unit at Dairy Farm Residences. She said she did not mind paying more for a mixed-use development as she values the convenience the property offers.

“At my old home, I had to walk 20 minutes to get to a convenience store. It was really inconvenient. Now, it’s super convenient. FairPrice Finest is just downstairs, and I have a good selection of cafes to dine in.”

The rise in popularity of such integrated developments – combining residential, commercial and retail spaces, and sometimes located near or above MRT stations – has been a trend in recent years. Property experts pointed out that amenities and transportation links have been key drivers of their value appreciation.

Mr Eugene Lim, key executive officer of ERA Singapore, said: “The convenience of having an MRT station and retail mall at your doorstep makes these developments appealing to buyers, and they tend to hold their prices well.”

Mr Wong Xian Yang, head of research for Singapore and South-east Asia at Cushman & Wakefield (C&W), said mixed developments on average have outperformed purely residential developments, possibly due to the former’s relative rarity.

Between 2018 and 2023, about 33 per cent of, or 16, government land sales (GLS) sites awarded were for mixed-use projects. In the first five months of 2024, three out of five sites awarded were for mixed-use purposes, The Business Times reported recently.

Looking at major projects – more than 100 units – launched from January 2023 to May 2024, mixed developments achieved on average about a 47 per cent sold-out rate in their month of launch, compared with single-use residential developments at about 39 per cent, said Mr Wong.

PropNex chief executive Ismail Gafoor said it is not uncommon for such projects to achieve higher take-up rates at their project launches as well.

A number of mixed-use developments launched in recent years saw more than 70 per cent or 80 per cent of the units sold during the launch, he said.

Pasir Ris 8 sold 85 per cent of its units at its launch.

Another mixed-use development, J’Den in Jurong East, which will be directly connected to Jurong East MRT interchange and malls such as Westgate, IMM and Jem,

sold 88 per cent of its units at its launch in 2023

.

The 323-unit leasehold development is built on the site of the former JCube mall.

“We think prospective buyers may be willing to pay a bit more if it means they will have a mall downstairs with a range of shops that fulfil their daily needs, such as a supermarket, eateries, pharmacies, and other services,” said Mr Gafoor.

The Urban Redevelopment Authority’s data on caveats – legal documents registering interest in a property – lodged from 2021 to May 2024 showed that the overall median unit price at mixed-use developments One Bernam in Tanjong Pagar rose by 19.5 per cent, followed by Midtown Modern (in Tan Quee Lan Street in Bugis) at 16.4 per cent.

Integrated development One-North Eden in Buona Vista, fully sold in 2022, had a 1,410 sq ft unit bought at $2.54 million – or $1,800 psf – in 2021, which was resold at $3.28 million – or $2,326 psf – in May 2024, marking a 29 per cent profit for the owner.

In contrast, purely residential development The Commodore, a 219-unit project in Sembawang, saw an overall price drop of 1.2 per cent when the last few units were sold in 2023.

A separate study by ERA also noted that mixed-use developments recorded higher median prices in the first half of 2024 compared with developments of a similar age in the same area.

Mixed-use development Park Place Residences at PLQ achieved a higher median price of $2,230 psf in the first half of 2024, compared with residence-only condominiums Tre Residences’ $1,730 and Sims Urban Oasis at $1,867 psf, noted Mr Lim.

Mixed-use development Compass Heights in Sengkang, completed in 2002, registered a higher median price of $1,167 psf over $996 psf for Rivervale Crest, a purely residential development that was completed in 2003 and is less than 2km away, noted the ERA study.

Mr Wong of C&W noted that a recent increase in mixed-development supply has come as a result of the authorities releasing more sites through the GLS confirmed list.

The release of land boosted overall private residential supply, moderating price growth.

“Mixed-use development sites tend to attract a higher land premium, and this typically translates to higher launch prices compared with a pure residential development with similar locational and project attributes,” said Mr Wong.