What constitutes a prime residential district? The key factors that
differentiates prime districts from others are location and price. For
Singapore, Districts 9, 10 and 11 have always been heralded as the crown
jewels of the island with their central location and ability to command
some of the highest premiums for residential land.
Over the years, the salient need to rejuvenate ageing estates and
sustain urban redevelopment in land scarce Singapore has led the
government to actively pursue and introduce new initiatives to transform
the Singapore landscape. With ongoing urban renewal in the last two
decades, the boundaries of prime areas have begun to expand.
This paper focuses on analysing Singapore’s new prime areas – Marina
Bay and Sentosa Cove – as well as the emerging prime areas –
Ophir-Rochor Beach Road, Tanjong Pagar and Keppel Bay – against the
traditional prime districts. The growing response of homebuyers and
investors to the residential properties in new and emerging prime areas
has helped to establish price levels that are similar to the traditional
prime districts. It is a new dawn on the horizon for the nation, as
changes to the urban fabric of the city state will continue to challenge
preconceived ideas of prime districts.
Housing in Singapore
Departing from the yesteryears of villages and squatter settlements, the Singapore housing
landscape has rapidly evolved into one that is filled with numerous
high- rise, high density developments. Singapore is divided into five
regions – the Central Region, North Region, North-East Region, East
Region and West Region (Figure 1). The Central Region is further
subdivided into Core Central Region (CCR) and Rest of Central Region
(RCR). Collectively, North Region, North-East Region, East Region and
West Region are classified as Outside Central Region (OCR).
At present, approximately 80% of the population live in public
housing flats, while the remaining 20% reside in private homes. Out of
the total housing stock of 1.38 mil units, 74% are public housing and
26% are private housing estates. As at March 2018, there were 365,591
homes in the private housing sector.
By distribution, approximately 77% of private housing stock is
concentrated within the RCR and OCR, while the remaining 23% of housing
developments are nestled in the heart of the city, within the CCR. The
CCR – generally referred to as the prime residential locality –
comprises the prominent Districts 9, 10, 11, the Downtown Core and
Sentosa (Figure 2).
Traditional Prime Areas - Districts 9, 10 and 11
Traditional prime districts 9, 10 and 11 are often placed on a
pedestal in the residential market scene. Historically, the limelight
was drawn to these districts due to the presence of embassies, high
commissions and international schools. The prestige and exclusivity of
these locations largely came about due to the association of these
districts as homes of the local affluent families and wealthy
expatriates. According to government statistics, less than 50% of the
total private housing stock have freehold tenure, where most of which
are found in districts 9, 10 and 11, amplifying the appeal of
residential developments within these areas.
Orchard Road, Singapore’s premier shopping belt, is a core component
in the appeal factor of District 9. It is a stretch of retail
developments that offer a plethora of entertainment and retail options.
Designer goods and luxurious lifestyle options which are abundant here,
are often prerogatives for the well-heeled community that reside within
These districts are also home to majority of the city’s most coveted
form of landed housing, the Good Class Bungalows (GCBs). GCBs are widely
considered to be the crème de la crème amongst housing options in the
Singapore residential market. There are approximately 2,800 GCB plots in
the 39 Good Class Bungalow Areas (GCBAs) gazetted by the Urban
Redevelopment Authority (URA). According to URA planning guidelines, the
minimum land size for each GCB is 15,000 sq. ft. These exclusive
pockets of land are endowed with freehold tenures, and developments on
the land are subjected to a height restriction of two storeys, special
planning parameters for site coverage and building setbacks. These
planning guidelines serve to ensure sufficient open space surrounding
each bungalow to protect its exclusive environment. GCBs are classified
as restricted properties, where only Singapore citizens are allowed to
buy and own them.
Of the 39 GCBAs, 34 are situated in districts 10 and 11, with the
remaining five found in three other districts outside CCR, namely
districts 20, 21 and 23. In an urban landscape filled with sprawling
high-rise buildings, the low-rise characteristic of GCBs amid the
surrounding lush greenery adds to the undeniable allure of the
traditional prime districts. With no known intention on the government’s
part to create new GCBAs, the dominant presence of GCBAs within
districts 10 and 11 only serve to enhance the prestige of the
traditional prime districts.
Undoubtedly, accessibility is a key deciding factor that weighs in
heavily for both homeowners and investors alike. With the provision of
mass rapid transit via the Circle Line (CCL) and Downtown Line (DTL)
complementing the existing North-South and East-West lines, residents in
the traditional prime districts now have direct access to some of the
city’s best amenities, and to the Central Business District (CBD). The
culmination of these location-centric factors enables the traditional
prime districts to remain as the top choice for residency among locals
Traditional Prime Area Prices and Rents Analysis
In analysing the performance of the traditional prime areas against
that of the new prime and emerging prime areas, the periods that were
selected as basis for comparison are 2004Q1, 2009Q2, 2017Q2 and 2018Q1.
These periods, excluding 2018Q1, reflect the trough of each market cycle
when prices bottomed out. 2004Q1 was the trough of the economic
recession in 2001-2004, and 2009Q1 was the time when prices were at the
lowest point during the global financial crisis, which ended in 2015.
2017Q2 was the trough following a series of property measures introduced
to cool the property market.
Price points in each of these trough periods serve as a comparison to
how prices in each district have moved over time. A comparison was made
between the prices in 2017Q2 and 2018Q1 to track the magnitude of price
changes over three quarters. Similarly, an analysis of the movement in
rents between 2017Q2 and 2018Q1, was made.
As shown in Table 1, District 9 experienced a significant price
growth between 2017Q2 and 2018Q1. Driven largely by new sales, such as 8
Hullet, Martin Modern, New Futura and Sophia Hills, prices recorded a
significant 25% spike from $1,998 psf in 2017Q2 to $2,493 psf in 2018Q1.
With an insurgence of new projects within the district, where a
majority of the transactions were of smaller units (538 sq ft to 764 sq
ft), average prices rose sharply from $2,100 psf to $2,800 psf. The
price quantum of these new units ranged from $1.28 mil to $2.80 mil.
Among the traditional prime districts, District 9 has consistently led
prices throughout the period covered in this study.
Since 2004Q1, prices in District 10 have been on a steady uptrend.
Between 2017Q2 and 2018Q1, prices reflected a gain of 11% to $2,064 psf.
The jump in prices was largely supported by resale transactions of
older buildings, priced between $1,300 psf to $2,000 psf. Luxury
transactions of above $3,000 psf represented only 11% of total sales
volume in 2018Q1, as compared to 13% in District 9 over the same period.
With new launches coming onto the market, prices in District 10 are
expected to rise for the rest of 2018.
In contrast to the other traditional prime areas, District 11
experienced a price fall of 2% between 2017Q2 to 2018Q1. The decline in
prices could be attributed to the sale of older and larger resale homes,
and a lack of new project launches. Only two new projects were known to
be launched since 2015, namely 6 Derbyshire and Newton 26. With new
developments on recent collective sale sites expected to be launched in 6
to 12 months’ time, prices are likely to experience a boost at a later
Similar to the price performance, rents continued to gain momentum in
the traditional prime districts, excluding District 11. Ahead of the
rest, District 9 recorded a 24% rise since 2017Q2, which could be
attributed to the higher rental rate per square foot commanded by the
smaller units in new buildings like The Scotts Tower and Cairnhill Nine.
Rents in District 10 remained relatively stable while those in District
11 recorded a 3% drop, which could be attributed to bigger unit sizes
in older developments (Table 2).
With concurrent growth in both prices and rents, gross yields
remained stable across the three districts (Table 3). As the number of
new projects injected into these districts increases, prices and rents
are expected to receive a boost, connoting expected growth for gross
yield as well.
The proportion of foreigners and permanent residents (PRs) who bought
homes in Districts 9 and 10 is generally higher than those who bought
homes in District 11. This could be attributed to their preference for
Orchard Road, Tanglin Road and Holland Road areas, sas well as Mount
Elizabeth Hospital and Gleneagles Hospital which are also located close
by. On average, 32% to 38% of the buyers in Districts 9 and 10 are
foreigners and PRs while the proportion in District 11 is around 20%.
New Prime Areas
Moving in tandem with the changing needs of the nation, the
government spearheaded major land use and development initiatives in
Marina Bay and Sentosa Cove in 2004, culminating in the subsequent
emergence of new prime areas within the CCR.
Formerly a body of water bereft of land, the Marina Bay has evolved
into the masterpiece of Singapore’s skyline over a span of 15 years. The
completion of the iconic Marina Bay Sands integrated resort in April
2010 and the Gardens by the Bay in June 2012, were key contributors to
the tourism boom. The Marina Bay Financial Centre, completed in 2010,
with some 3 million square feet of Grade A office space, has attracted
some of the biggest names in the financial services industry and
technology-media-telecom sector to Singapore since it began operations.
Marina One, a commercial-cum-residential project jointly developed by
the governments of Singapore and Malaysia, was completed in 2017.
Touted as the largest integrated development within the Marina Bay
financial district, the project offers 1,042 residential units, 1.88
million square feet of premium office space and 140,000 square feet of
retail options. Another new development that is underway is IOI
Properties’ commercial project at Central Boulevard, which is expected
to offer over 1 million sq.ft. of office space.
The next phase of development for the Bay is slated to be in Marina
South precinct, where the focus will be on creating a lively,
high-density mixed-use residential district. More options for
city-living have been announced, with 9,000 new homes to be added. The
Thomson-East Coast Line (TEL), which is currently under construction and
expected to be completed by 2025, will enhance the connectivity of the
people living in the area to the rest of the island.
Marina Bay Prices and Rents Analysis
Prices in Marina Bay recorded a steady rise of 11% from $2,087 from
2017Q2 to $2,322 psf in 2018Q1 (Table 4). Marina One Residences (1,042
units), the latest project in the precinct, has been the main driving
force behind the rising prices for the area since 2014. Other
residential developments in the area include The Sail @ Marina Bay,
Marina Bay Residences and Marina Bay Suites.
Given the concentration of financial services businesses within the
CBD, the area is likely to remain attractive to expatriate professionals
who value living in close proximity to their work places. At $2,322
psf, prices in the Marina Bay precinct lagged behind District 9 by 7%,
while remaining higher than those in District 10 by 13% and those in
District 11 by 57% (Table 4). With the government’s plans to further
develop the Marina South precinct, there is potential for further price
appreciation in Marina Bay.
In 2018Q1, rents in Marina Bay fell by 3%, from the level in 2017Q2.
The dip in rents may be due to stiff competition from the new in-city
residential projects at Tanjong Pagar. Nevertheless, the precinct still
outperformed the traditional prime districts of districts 9, 10 and 11
by 57%, 44% and 40% respectively (Table 5). The resilience in rents
could be attributed to the appeal of city-living and the connectivity to
the rest of the island via mass rapid transit (MRT).
With prices and rents trailing behind the economic upturn, gross
yields fell by 3% in 2017Q2 to 2.6% in 2018Q1 (Table 6). The recent
completion of Marina One Residences may act as a stimulus for rental
growth, which could translate to better yields in future.
Based on caveats lodged, 33% of the buyers in 2018Q1 were foreigners and PRs, a slight improvement from the 31% seen in 2017.
Akin to Marina Bay, Sentosa Cove is primarily built on reclaimed
land, comprising five man-made islands. The government planned for
Sentosa Cove to offer high-end residences that promotes the resort and
waterfront lifestyle, designed to appeal to savvy and well-travelled
investors and home owners.
Sentosa Cove is especially appealing to foreign investors, as it is
one of the few opportunities where they are able to own a landed home,
unlike on the main island where land is classified as restricted
property, such that only Singaporeans are permitted to do so. This
unique proposition, coupled with the growth of Singapore as a safe haven
for foreigners to invest in residential properties, attracts foreign
investors and homebuyers alike. Since the first land parcel sale in
2003, Sentosa Cove has developed into an exclusive, gated residential
enclave with some 1,800 condominiums, 300 bungalows and 40 terrace
Sentosa Cove Prices and Rents Analysis
At $1,517 psf in 2018Q1, Sentosa Cove recorded a 3% rise in price
levels from $1,468 psf in 2017Q2 on the back of a slight increase in
volume of transactions (Table 7).
In contrast to the steady increase in price levels, rents have been
weakening (Table 7). In 2018Q1, it stood at $3.72 psf, marking a 1%
decline from $3.77 psf in 2017Q2 (Table 8). The impact on gross yields,
however, is very marginal (Table 9). Against the backdrop of waning
rents, the precinct recorded a healthy premium of 15% over rentals
achieved in District 9, 5% over District 10, and 2% higher than the $
PSF achieved in District 11.
While transaction volume has been thin, Sentosa Cove has remained
fairly consistent with 30% to 40% of buyers who are foreigners and PRs.
As at 2018Q1, this group of buyers made up 60% of the total
transactions. With expectations set for market sentiments to improve,
the return of foreign investors to the Sentosa Cove market will
reinvigorate both prices and rents once more.
Emerging Prime Areas
Over time, Singapore’s CBD’s landscape has morphed into a modern-day
metropolis with an ever-increasing number of skyscrapers and iconic
landmarks. These changes have had positive ripple effects on the prices
and rents of real estate within the CBD and its surrounding. New prime
areas are beginning to emerge at the fringe of the CBD, namely
Ophir-Rochor Beach Road and Tanjong Pagar, as well as at Keppel Bay,
which is on the rise as a prime housing precinct.
OPHIR-ROCHOR BEACH ROAD
Home to some of Singapore’s well-known heritage sites, such as
Kampong Glam, the Ophir-Rochor Beach Road area was historically known as
the “European Town” in the colonial days. Under the Raffles Town Plan1,
much of the area was designated for use as living quarters by the
European community. Today, this location is known for the exciting new
developments that have sprouted out in the area.
Located in close proximity to Singapore’s CBD, the government
leveraged on Ophir-Rochor Beach Road’s geographical advantage to expand
the CBD beyond its existing boundary. Prior to the extension plans,
Beach Road was lined with shophouses and several office developments.
With the twin objectives of expanding the CBD and gentrifying the older
developments within the area, new projects such as South Beach by South
Beach Consortium Pte Ltd and DUO2 by M+S Pte Ltd, were approved in 2007
and 2011, respectively. Completed in recent years, these projects
harnessed the aspects of ‘Live, Work, Play’ through the incorporation of
residential, commercial and hotel components that serve to enhance the
vibrancy of the area. As recent as October 2017, the government awarded a
third commercial site – which includes the former Beach Road Police
Station – to a joint venture between Guocoland and Guoco Group. The site
is stipulated to be transformed into a mixed-use project with
underground access to Bugis MRT station.
As these new integrated developments gradually transform the
Ophir-Rochor Beach Road precinct into a dynamic landscape, the
government’s agenda of creating an environment that enhances liveability
and connectivity throughout the island, are simultaneously achieved.
Ophir-Rochor Beach Road Prices and Rents Analysis
The government’s initiative to rejuvenate the area as well as the new
developments that were introduced played a crucial role in propelling
prices. Ophir-Rochor Beach Road pricing landscape recorded a stellar 37%
growth from $1,421 in 2017Q2 to $1,947 psf in 2018Q1 (Table 10). The
stark jump in price could be attributed to the sales of units in
Concourse Skyline and the new project, Duo Residences. Concourse Skyline
was first launched in 2008, when sales were hampered by the sub-prime
mortgage crisis. Since 2017, there has been renewed interest in the
development, resulting in a pick-up in sales volume. Compared to the
traditional prime districts, prices in Ophir-Rochor Beach Road trailed
behind District 9 and 10 by 22% and 6%, respectively. On the other hand,
the area’s prices were 31% above those of District 11.
As the rejuvenation of Ophir-Rochor Beach Road progresses, the area
continues to grow as an attractive option to expatriate professionals
who are working in the CBD. Rents have been on the uptrend and recorded a
16% rise from 2017Q2 to 2018Q1 (Table 11). Contrasting the performance
of Ophir-Rochor Beach Road with the traditional prime districts, the
area commanded a larger premium than those of its reputed counterparts
In spite of the appreciation in both prices and rents, gross yields
remained below 2017Q2 levels, standing at 2.9% at 2018Q1 (Table 12).
While the fall in rents was marginal, at 0.14%, a likely cause of this
downside could be due to prices for the area rising at a faster pace
than rents. With new projects, such as Duo Residences, driving the
Ophir- Rochor Beach Road market, rents of older buildings in the
vicinity fall short of the new price levels being set. In the pipeline,
South Beach Residences and GuocoLand’s upcoming integrated project at
Beach Road are expected to serve as catalysts that will help to sustain
price and rental growth for the area. Some 35% of the buyers in 2018Q1
were foreigners and PRs, maintaining at the same level as in 2017.
From the initial years as a humble fishing village, Tanjong Pagar has
gone through a major overhaul of its previous image to transcend into
the lively business and lifestyle hub of today. Situated at the
periphery of the financial district, a fair share of the bustling
business activities has spilled over into the area.
has undergone a major rejuvenation in recent years, with the iconic
Tanjong Pagar Centre by Guocoland as the pièce de résistance for the
area. Its 890,000 sq ft office component, Guoco Tower, was completed in
2016 alongside the retail component in the basement which is connected
to the Tanjong Pagar MRT station. The 181 luxury apartments in Wallich
Residence featuring the 21,108 sq ft Super Penthouse on levels 62 to 64,
the 222-room Sofitel Singapore City Centre hotel and an urban park were
completed in 2017. Other projects that are part of Tanjong Pagar’s
transformation process include two residential skyscrapers, Altez and
Skysuites @ Anson, the PS100 – a hotel and office development that
houses Oasia Hotel Downtown – as well as Carlton City Hotel. With these
additions, the dynamism and use of this area becomes relevant and
well-positioned to blend in with the existing financial district.
As the government gears towards injecting a new lease of life for the
Tanjong Pagar area, more plans lie ahead. A prominent initiative
announced by the URA for the precinct include the Greater Southern
Waterfront project, where the relocation of the Keppel, Tanjong Pagar
and Pasir Panjang Terminals to Tuas will free up approximately 1,000
hectares of waterfront land for development. The proposed plans include
more housing options in the future, with a recurring theme of
sustainability and connectivity being incorporated into the design of
the built environment.
Tanjong Pagar Prices and Rents Analysis
Private residential prices in Tanjong Pagar recorded a 12% increase
from 2017Q2 to 2018Q1 (Table 13). The growth was primarily driven by new
developments, such as Wallich Residence and V on Shenton, which is the
residential component in the redevelopment of the former UIC Building,
as well as resale units of Altez and Skysuites @ Anson. Most of the
units sold in Wallich Residence and V On Shenton were on higher levels,
which came with larger premiums for the enjoyment of view. The units at
Wallich Residence fetched around $3,450 psf in 2018Q1, while those of V
On Shenton transacted at $2,350 psf.
Compared to the other emerging prime districts, Tanjong Pagar emerged
as the best performer in terms of rents, with minimal changes recorded
from 2017Q2 to 2018Q1 (Table 14). The progressive rejuvenation of the
area has seen new developments being rolled out one after the other,
revitalising the landscape altogether. This has enabled Tanjong Pagar to
have comparative advantage over the traditional prime districts, which
is evident from the 75% premium in rents over District 9, 60% over
District 10 and 56% over District 11.
Gross yields for Tanjong Pagar stood at 3.7% in 2017Q2 but fell to
3.3% in 2018Q1 due to the significant rise in prices (Table 15). Rents
are likely to remain on the uptrend for the coming months as units in
the upmarket Wallich Residence are progressively being leased out. With
future changes in the horizon to transform the area into an integrated
precinct, prices and rents in Tanjong Pagar are expected to have upward
Tanjong Pagar has been able to attract a healthy level of buying
interest among foreigners and PRs. In 2018Q1, this group of buyers
formed 38% of the total transactions.
The launch of Caribbean At Keppel Bay in 2000 was the first step
towards the transformation of the former Keppel Harbour into the vibrant
marina-waterfront living precinct that it is today. To date, the Keppel
Bay waterfront is lined by three iconic residential developments –
Caribbean At Keppel Bay, Reflections At Keppel Bay and Corals At Keppel
Bay – with a total of 2,464 apartments. The two residential developments
being planned, one on Keppel Island and the other on Harbourfront
Avenue, will contribute another 320 new homes to this precinct once
As both Keppel Bay and Sentosa Cove precincts mature over the years,
the marina-waterfront housing lifestyle has taken roots and offers an
attractive living concept to prospective buyers. The jury remains
divided over which marina-waterfront precinct is “better” than the
other. The truth is both precincts offer different qualities, concepts,
aspects and housing types to suit the different needs of local and
Being situated on the mainland, Keppel Bay is perceived to have the
advantage of being closer to amenities and to have better accessibility
and connectivity. Following the announced extension of the CCL to
include three more stations (Keppel, Cantonment and Prince Edward) to
close the circle, Keppel Bay will be directly connected to Marina Bay in
the Downtown Core. When these stations are in operation by 2025, travel
time between Keppel Bay and the CBD will be reduced by one-third of the
current travel time.
Keppel Bay Prices and Rents Analysis
While there are currently no new projects at Keppel Bay, prices of
Caribbean At Keppel Bay, Reflections At Keppel Bay and Corals At Keppel
Bay have been rising since 2009Q4. Caveat data between 2017Q2 and 2018Q1
reflected a 1% fall in prices from $1,763 psf to $1,745 psf (Table 16).
From the analysis of the transacted data, it was revealed that majority
of the units sold were over 1,000 sq ft. The larger price quantum,
ranging from $2 mil to $3.5mil, translates to a lower price per square
foot rate, reflecting an apparent decline in prices.
Keppel Bay met with a 2% dip in rents from $4.55 in 2017Q2 to $4.48
psf in 2018Q1 (Table 17). However, the gross yields for the area
remained unchanged at 3.1% (Table 18). Rents for the precinct remained
comparable to those in Ophir-Rochor Beach Road. When the new MRT
stations on the CCL become fully operational, enhanced accessibility and
better connectivity will attract more people to live in the area.
Of the 36 units sold in 2018Q1, 33% were bought by foreigners and
PRs. While in 2017, it was 30% out of 161 transactions. This shows that
the waterfront living at Keppel Bay is attractive to foreigners and PRs,
despite its further location from the CBD.
Outlook and Future Prospects
The new and emerging prime districts – Marina Bay, Ophir-Rochor Beach
Road, Tanjong Pagar and Keppel Bay – are slowly developing their own
distinct identity which sets it apart from the traditional prime
districts. The modernisation of the built environment aligns with the
government’s grand scheme of steering the nation towards integrated
living, where people are seamlessly connected by additional transport
nodes and walking paths to work places, residences and a host of
amenities. For budget conscious tenants, the abundance of housing
options available within the Downtown Core allows them to find
accommodation which fits their budget.
From the outset, the government has envisioned Sentosa Cove to be a
luxury waterfront living enclave where foreigners are welcome to
purchase and own landed properties, which is otherwise disallowed on the
main island. Sentosa Cove will compete on an international scale with
locations in other global cities that offer a similar lifestyle concept.
A foreigner who wishes to buy a landed property in Sentosa Cove can
obtain approval from Singapore Land Dealing Unit within two days. The
property is for owner-occupation and should not be let out. As there are
no plans for new supply to be made available in Sentosa Cove, its
scarcity will enable capital preservation and appreciation over time.
For foreigners who value Singapore’s stable political and economic
climate as a safe haven to park their funds, they will return when the
timing is right for investment.
Contrary to the common ideal that the traditional prime districts are
the crown jewels of the island, one can now consider the emerging prime
districts as an alternative investment option. As illustrated in Table
19, the highest price per square foot achieved in 2018Q1 is relatively
lower than the previous market cycle, with the exception of Tanjong
Pagar. This is likely due to the 15 consecutive quarters of price
corrections from 2013Q2 to 2017Q2. Following the slump in prices, the
recovery over the last 3 quarters reveals the potential for prices to
reach, or even surpass, previous levels as the market strengthens.
A case in point would be Tanjong Pagar. Prior to the launch of
Wallich Residence, there were only two transacted units in The Clift
that exceeded the $3,000 psf mark in 3Q 2012. Since then, the majority
of units sold in Wallich Residence were priced at $3,000 psf and above,
with one transaction breaching the $4,000 psf threshold in 4Q 2017. This
shows that when an emerging prime area is anchored by a large scale,
high quality integrated project with good transport linkages, it will
command a premium. The next location to watch out for is Ophir-Rochor
Beach Road. The coming launch of South Beach Residences – part of South
Beach integrated project encompassing South Beach Tower and JW Marriot
Singapore – looks certain to set a new price for this area.
The propensity for growth presents a lucrative value proposition for
the astute investor to tap into, as there remains a scope for price
appreciation fuelled by future developments in the pipeline. The steady
rental income generated by the emerging prime areas will also be
attractive for investors who are looking at yield play.