UOL's Watergardens project sells 60% of units at launch weekend

30 Aug 2021
Property News

An artist's impression of The Watergardens at Canberra. The low-rise project comprises 16 five-storey buildings and is expected to be completed in Q2 2026. 

THE Watergardens at Canberra moved about 60 per cent of its 448 units - which works out to roughly 268 units - over its launch weekend on Aug 28 and 29.

Prices started from below S$920,000 or S$1,424 per square foot (psf) for the two-bedroom units, below S$1.3 million or S$1,438 psf for the three-bedroom units, and below S$1.8 million or S$1,382 psf for four-bedroom units.

UOL told The Business Times (BT) that the per-square-foot (psf) pricing for “typical units sold” ranged from S$1,400 psf to almost S$1,550 psf.

In a note on Monday, Citi analyst Brandon Lee estimated that the overall selling price at the 99-year leasehold condominium stood at around S$1,450 to S$1,500 psf, within the research team’s expectations and higher than the S$1,100 to S$1,200 psf achieved at nearby projects.

The price range of S$1,450 to S$1,500 psf would translate to a profit-before-tax margin of 14-17 per cent, based on breakeven of S$1,240 psf and revalued net asset value (RNAV) accretion of 0.3-0.4 per cent, according to Citi’s estimates.
 
However, the sale volume "may have fallen slightly short of selected investors' expectations" following Pasir Ris 8's 85 per cent take-up last month, and given that The Watergardens is only the second major non-executive condominium mass-market project to be launched this year, Mr Lee added.

Located in the Sembawang/Yishun area, The Watergardens is the first private residential development in the northern part of Singapore to come to the market in more than six years.

UOL Group chief investment and asset officer Jesline Goh said in a statement that the buyers at the launch weekend were mostly homeowners, and the sales were "well spread across all unit types". More than 85 per cent of the buyers were Singaporeans, the company told BT.

Ms Goh noted: "Based on what we observed, buyers are particularly attracted to the project's strong product attributes, lush greenery, as well as its proximity to Canberra MRT station and the future North Coast Innovation Corridor."

The low-rise project comprises 16 five-storey buildings, and the two to four-bedroom units range in size from 646 square feet (sq ft) to 1,528 sq ft. It is expected to be completed in Q2 2026.

In Citi's view, the launch performance represented "a solid result" for UOL, and is likely to sustain the ongoing residential property upcycle, especially in the mass-market segment.

It may also drive keen competition for three upcoming government land tenders in September, Mr Lee wrote.

The Watergardens is developed by a 50:30:20 joint venture among UOL, its 50.1 per cent-owned unit Singapore Land Group, and Kheng Leong Company.

Nearby, The Commodore by JBE Holdings, slated to launch later this year and housing about 219 units, should benefit from spillover positive sentiment from The Watergardens, Mr Lee added.

UOL reopened The Watergardens' showflat on Aug 14, after it was closed from July 21 in view of Singapore's return to Phase 2 (Heightened Alert).

Back in July, ERA head of research and consultancy Nicholas Mak told BT there was pent-up demand among HDB upgraders for affordable private housing.

Citi's Mr Lee on Monday noted that he foresees The Watergardens' sales performance to have a slight positive impact on UOL's share price. However, the research team continues to view City Developments Limited (CDL) as "a cheaper residential proxy given its deeper RNAV discount of 53 per cent versus UOL's 41 per cent".

Mr Lee recommended "buy" on UOL shares with a target price of S$8.87.

At Monday’s close, UOL rose 1 per cent or S$0.07 to S$7.08. Shares of Singapore Land Group, formerly known as UIC, finished 0.8 per cent or S$0.02 higher at S$2.69.




Source: The Business Times
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