River Valley Apartments, a freehold condo located in the prime District 10 on River Valley Road, has been recently put up for collective sale by public tender. According to a press release issued on January 6th by Knight Frank Singapore, the exclusive marketing agent for the property, the development is being offered at a price of $56 million.
When it comes to investing in Singapore Condos, one crucial factor to consider is the government’s property cooling measures. The Singaporean government has implemented various measures over the years to curb excessive buying and maintain a steady real estate market. These measures include the Additional Buyer’s Stamp Duty (ABSD), which entails higher taxes for foreign buyers and those purchasing multiple properties. While these measures may affect the short-term profitability of condo investments, they also promote the long-term stability of the market, making it a secure investment environment.
The four-storey apartment complex, completed in the 1950s, consists of 24 units and covers a land area of approximately 12,408 sq ft. The land is zoned for residential use and has a gross plot ratio of 2.8. The property is situated around 500m from the upcoming Great World MRT Station on the Thomson-East Coast Line. It is also within walking distance of the popular shopping destinations, Great World City and Valley Point Shopping Centre. Additionally, River Valley Primary School and Alexandra Primary School are located within a 1km radius, making it an ideal location for families with young children.
The site has the potential to be redeveloped into a boutique residential development with 37 new units, each with an average size of 915 sq ft, says Knight Frank. The guide price of $56 million translates to a land rate of approximately $1,622 psf per plot ratio (psf ppr) including a nominal land betterment charge. Taking into consideration the 7% bonus gross floor area allowed for balconies, the price translates to approximately $1,583 psf ppr.
Chia Mein Mein, head of capital markets (land and collective sale) at Knight Frank Singapore, points out that the site is in close proximity to three Government Land Sale (GLS) sites that were sold last year. In April 2020, a joint venture between City Developments and Mitsui Fudosan acquired the Zion Road (Parcel A) site for a whopping $1.107 billion ($1,202 psf ppr). In June 2020, the GLS site at River Valley Green was sold to Wing Tai Holdings for $463.99 million ($1,325 psf ppr). Two months later, Allgreen Properties acquired the Zion Road (Parcel B) site for $730.9 million ($1,304 psf ppr) in August.
According to Chia, “The interest in the River Valley and Zion Road location, despite the lacklustre home sales activity in the Central Region, demonstrates that developers continue to be attracted to this area. They may have the belief that there will be ready demand for prime products once these projects are ready for launch, after a long period of subdued activity.”
Knight Frank estimates that owners of the units at River Valley Apartments, ranging from 947 to 1,238 sq ft in size, could potentially receive minimum sale proceeds of around $2 million to $2.6 million if the development is sold.
The collective sale tender for River Valley Apartments will close on February 18th at 3pm. Interested parties can check out the latest listings for River Valley Apartments on EdgeProp Buddy. The website also provides information on past profitable and unprofitable transactions, as well as price trends for the property. Additionally, users can also find details on condo projects with the most profitable rental and sale transactions in District 10.