Real estate is generally considered low to medium risk as an investment because it gives you a tangible asset that you can tap on for returns, and investing in a location that guarantees demand ensures consistent cashflow.
If you’re planning on investing in Singapore property next year, then the upcoming new launch condo at Tanah Merah Kechil Link is one of your best bets. While not many details of the project has been revealed, its promising location is already proving to be strategic for property investors.
New condo on Tanah Merah Kechil Link: Launching Q1 2022
A 99-year leasehold, mixed-use development is set to be developed on the Tanah Merah Kechil Link site by MCC Land. It will comprise 265 residential units and commercial space on the first floor, which will come in handy as there are not many amenities nearby as of yet.
The Tanah Merah Kechil Link condo is slated to be completed in 2026.
MCC Land won the bidding war for the site in the October 2020 Government Land Sales (GLS) exercise with a bid of $249 million, which translates to $930 per square foot (psf) per plot ratio.
The October 2020 Government Land Sales (GLS) exercise drew media buzz after it triggered a land bidding frenzy from 15 developers. According to The Straits Times, “this represents the highest number of bids since the Holland Road commercial and residential site tender in May 2018, which drew 15 bids from 10 consortiums.”
Why the love from developers? Let’s take a look.
Tanah Merah MRT right at your doorstep
The Tanah Merah Kechil Link site is directly opposite the Tanah Merah MRT station and interchange, located along Upper Changi Road. This is what drew developers to the site, research analysts said.
The Tanah Merah MRT station will connect you to Singapore Expo, Changi Business Park and Changi Airport in a matter of minutes. Meanwhile, car owners can get to the rest of the city via the New Upper Changi Road and East Coast Parkway.
More than the convenient access to transportation, property investors will be glad to note that the surrounding condos near the Tanah Merah Kechil site has been faring well in the market.
Market trend of Tanah Merah condos
Several developments surround the Tanah Merah Kechil Link site, some of which are also found along Tanah Merah Kechil Road and Tanah Merah Kechil Ave.
In this article, let’s focus on three adjacent condos: Urban Vista, Optima and Casa Merah.
Urban Vista is a 99-year leasehold condo with 582 units, comprising 1-4 bedders and penthouses. It was completed in 2016 and comes with your typical condo facilities, such as playgrounds, swimming pools, BBQ pits, and a tennis court, jacuzzi, clubhouse and gym.
There were 73 transactions recorded for Urban Vista between the years 2016 and 2021. And each year, the number of transactions was below 20 units.
However, there were 33 units sold from Jan to Dec 2021, which points to a possibility of pent-up demand from the circuit breaker period.
(Editor’s Note: All data from the year 2021 are only up to the date of publishing. This applies to the rest of the article.)
Optima @ Tanah Merah
Optima @ Tanah Merah is older than Urban Vista by four years. The 99 year-leasehold project was completed in 2012, complete with 297 units.
There were a total of 65 transactions for Optima @ Tanah Merah between 2016 to 2021. The number of yearly transactions dropped from 17 in 2018 to just 8 in 2019, before climbing up to 10 in 2020 and 12 in 2021.
These figures demonstrate a slow but steady increase in demand at Optima @ Tanah Merah for the past three years.
Casa Merah is a 99 year-leasehold condo near the Tanah Merah Kechil site, with 556 residential units comprising only 2- and 3-bedders.
There were 129 transactions at Casa Merah from 2016 to 2021, recording a peak at 34 transactions in 2017. However, this fell to 11 in 2019.
Sales have picked up since then and about 28 transactions were recorded in 2021.
Comparing number of transactions
According to URA, the development with the most transactions is Casa Merah, logging about 129 sales transactions. Urban Vista comes second with a recorded 33 transactions and Optima @ Tanah Merah with 65.
All three condos saw a drop in sales coming into 2019 but have since slowly picked up the following year. The number of units transacted close to doubled for Urban Vista and Casa Merah from 2020 to 2021. This could be because both are larger developments, offering more than 500 units, compared to Optima @ Tanah Merah with fewer than 300 units.
Overall, these three condos showed an increase in sales for the past three years, possibly due to the accumulation of pent-up demand in 2020 when physical viewings were not allowed for a time.
Comparing transacted prices
The priciest condominium is Urban Vista (the newest condo among the three), followed by the two older condos Optima @ Tana and Casa Merah. This could be because buyers preferred a newer apartment that required fewer repairs and renovations. There’s also lesser risk of a lease decay, which could help them should they sell it in the future.
What do all these mean for the upcoming Tanah Merah Kechil Link condo?
Pent-up demand to fuel interest in district 16
Looking at past new launches in district 16, projects in the area seem to garner heavy interest from buyers and investors. The most recent new launches in the area were completed in 2017 and 2018:
First, let’s take a look at Grandeur Park Residences: It’s a 99-year leasehold condo developed by CEL Development. The project launched at an average price of $1,389 psf in 2017. As of 2021, the 720-unit project is sold out.
Second, we have Sea Pavilion Residences. It is a 24-unit, freehold development developed by Oxley Holdings Limited. The project was launched at an average price of $1,761 psf in 2018 and is also sold out.
Are you seeing a pattern here?
Interest for projects in district 16 has remained consistent throughout the years. With the last new launch in district 16 only in 2018, when the project at Tanah Merah Kechil Link eventually launches, we can expect pent-up demand to play a factor in fuelling interest for the project in the area.
Attractive price positioning in the East
Among the districts in the east region, prices in district 16 are also relatively lower and positioned reasonably. This is especially the case for new launches in the district.
Looking at the average resale unit prices, we can clearly see that the prices in district 16 hold a premium in the East region as well. This is crucial if you are determining future reinvestment potential in the area as the attractive price points make the upcoming Tanah Merah Kechil project a worthy investment.
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Frequently Asked Questions about Tanah Merah Kechil Link
1. What amenities can I find near Tanah Merah Kechil Link?
The area is well connected to Tanah Merah MRT station, Bedok bus interchange, schools, supermarkets and business hubs.
2. What is the site lease for Tanah Merah Kechil Link?
It is a 99-year leasehold development.
3. Is the developer for Tanah Merah Kechil Link reputable?
MCC Land Ltd has more than 10 years of real estate development experience in Singapore. The company has been ranked among the top 10 real estate developers in Singapore by BCI Asia Top 10 Developer’s Award.
4. Which district or zoning is Tanah Merah Kechil Link?
It falls in zoning district 16.