A review on whether or not One Bernam is suitable for families, real estate investors or both. This review is done by researching with URA’s Master Plan 2019 for this particular district and location as well as using real estate investing formulas. Find out if this new launch is right for you
|Expected TOP||2024 (Estimated)|
|Address (Multiple)||Bernam Street|
|Number of Units||351|
|Bedroom(s) Type||1 – 3 Bedrooms and Penthouses Available|
|Best for||Family or Investment|
|Worst Case Scenario Pricing (PSF)|
See Calculation Below
|Average Case Scenario Pricing||Contact Me|
|URA Masterplan 2019 for District 2 and One Bernam||Downtown|
Greater Southern Waterfront
Always remember the market value of property is highly dependant on the rent you can ask for. If you are in a property where people are willing to pay a higher rent for as compared to another similar property in the vicinity, even if you are not renting out, your property value will naturally be higher.
Also, We will be using Eon Shenton, another leasehold condominium which TOPed in 2019. This development will be used as a comparison for the calculations.
Are there any points to take note of that might affect the valuation of One Bernam? Here are a few
- The 2 bedroom unit for Eon Shenton we are comparing has only one toilet while I am assuming the one for One Bernam will have 2 toilets.
- Eon Shenton just TOPed in 2019. The market forces has not yet affected the true market value of the property much. Over the next 2 – 3 years, you would be able to see the actual growth rate of the area.
- Not much information for one Bernam has been released from the developer yet. Once I’ve received them, you will be the first to know once I receive them. Send me a whatsapp text or contact form so I can keep you updated.
The next section will be on the calculations using Real Estate investing formulas. If you are interested to know more about One Bernam and more specifically on your preferred unit type, feel free to contact me here. A free report will be sent to you once we meet up to discuss your needs, wants and requirements.
If you are interested to see how the calculations are done for investing, you can read further below
This is a quick overview on One Bernam and how you would apply real estate investing research, principles and calculations before buying a unit in One Bernam for real estate investment purposes.
The unit we will be analysing will be for a 2 bedroom unit, high floor (27th floor) and also be comparing it with Eon Shenton which is 400m away.
This is not a review to tell you how awesome this development is, I will be doing this on a separate page of my website, under the listing section.
Also, I will only be comparing only one unit from Eon Shenton, which is not the usual practice. For clients interested in One Bernam Condo, I will usually compare 2 additional units or developments or based on which other development my clients want me to do the research on.
MCC Land bought over the 41,400 square feet site for SGD 440.9 million which works out to be around SGD 1,463 PSF.
Incorporated in 2010, MCC Land has been awarded Singapore’s Top 10 Real Estate Developers for 3 consecutive years.
The contractor that they use, China Jingye Engineering Corporation Limited (Singapore Branch), are highly regarded and are behind the construction of notable landmarks in Singapore such as Universal Studios Singapore and Maritime Experiential Museum, Resorts World, Sentosa.
|Developers Involved||MCC Land|
|No of Residential Developments in Singapore (Uncompleted)||3|
|No of Previous Residential Developments in Singapore (Completed)||11|
|No of Overseas Developments||2|
Comparison between One Bernam and Eon Shenton
|Development||Eon Shenton||One Bernam|
|Tenure||99 Leasehold||99 Leasehold|
|Number of Units||132||351|
Calculation of Growth Rate (For Eon Shenton and Central Region)
My research shows the transaction record for the following 2 bedrooms unit at 70 Shenton Way (#27-XX), 538 sqft at Eon Shenton was as follows
Transacted at 31 May 2012 – 2,208 psf
Transacted at 24 September 2019 – 2,416 psf
Time Period: 87 Months (To be rounded down for calculation purposes)
The annual growth rate for Eon Shenton would be estimated to be around 1.24%. Naturally, the more units you use, the more data you have and the more accurate you will get and. And as mentioned, I usually use 2 other units surrounding the unit I’m planning to buy to have a better estimate of the growth rate in that area.
The annual growth rate for Central Region based on SRX Property Index from January 2011 to January 2021 is 3.29%
Let’s just take this at face value. There are many ways we can discuss if we meet why the growth rate should be higher or lower.
Real Estate Investing Formulas used
Before we begin, note that these formulas are usually used for properties which are already existing, similar in age and size. One Bernam will only be completed in 2024 and will be 5 years newer than Eon Shenton by then. See more in the conclusion section.
Gross Rent Multiplier
The Gross Rent Multiplier Formula for Eon Shenton for a 2 bedrooms unit is as follows
GRM = Sales Price / (Annual Rent of Unit)
= 1,300,000 /(2,750 x 12)
= 39.3939 (Rounded to 4 decimal space)
With the following assumptions taken
- Sales Price of 1,300,000 SGD taken for the unit #27-XX 2 bedrooms unit which was sold on 24th September 2019
- Assumption of the monthly rent of 2,750 SGD based on worst-case scenario (No stats are given for the floor level, lowest was 2,750 SGD/ Month and highest was 3,800 SGD/Month. Both transacted on 1 January 2021).
Income Capitalisation Method (Modified)
Using the Income Capitalisation Method Formula, the Cap Rate for Eon Shenton is calculated as follows
Cap rate = Annual Net Operating Income / Market Value
= (Rent Income – Property Tax – Property Insurance – Annual Maintenance Fees – expected Maintenance and Repair – Vacancies Loss) / Market Value
= (33,000 – 3360 – 120 – (400 * 12) – (2 * 2,750)) / 1,300,000
Assuming the following
- Expected Maintenance and Repair is 0
- Maintenance Fee for Eon Shenton is assumed to be 400 SGD
Calculation for One Bernam using Cap Rate and Gross Rent Multiplier
Using Gross Rent Multiplier for One Bernam
For the assumption of rent for One Bernam, we assume to be SGD 3,578 as the 2 bedroom units for One Bernam are at 700 sqft.
Using the GRM of 39.3939 to find the sales price for One Bernam
Sales Price = 39.3939 * (3,578 * 12)
= 1,691,450 SGD (Rounded to whole number)
Using Income Capitalisation Method for One Bernam
Market Value for One Bernam = Net Operating Income / Cap Rate
= (Rent Income – Property Tax – Property Insurance – Annual Maintenance Fees – expected Maintenance and Repair – Vacancies Loss)
= (42,936.80 – 3552.42 – 120 – (400 * 12) – (2 * 2,750)) / 0.0148
= 1,779,434 SGD
Where the following assumptions are made
- Maintenance Fee is 400 SGD (Assumed)
- Expected Maintenance and Repair to be 0
Using the Time Value of Money Formula
Using the Time Value of Money Formula and using the worst-case scenario growth rate percentage of 1.24% and the 5-year difference between One Bernam and Eon Shenton, the price per square feet we should be looking to pay for a 2 bedrooms 700 sqft high floor unit would be $2,637.69 PSF
Do note that the formulas we are using are originally used for existing properties which are similar in age and with rental prices already available. We know that this is not the case as One Bernam will only be ready in 2024.
In addition, we need to also consider the following points
- Calculations done for the 2 bedrooms units may differ from their other bedroom types and layouts. Note that not all unit bedroom types are favourable for investment even if they are the exact same new launch. I’ve done calculations where the one and two bedrooms made losses or barely broke even while their 3 and 4 bedrooms were doing exceedingly well (for a new launch in the west region) or their 1 bedroom, three and four all made money while their 2 bedrooms capital appreciation never moved (for a new launch in the East region)
- One Bernam will be 5 years newer (2024 – 2019) than Eon Shenton.
- The estimated rent we are using is of the worst-case scenario at 3,578 SGD. What do you estimate the rent will be in 2024 for this area with the knowledge of the URA Master Plan 2019?
- Eon Shenton average rent is already transacting at an average of 3,275 SGD for the month of January 2021 alone for a 538sqft unit.
- One Bernam will be using smart home technology 5 years newer than Eon Shenton
- Buying a unit at Eon Shenton instead would require renovation cost which can cost upwards of 30,000 SGD to 80,000 SGD and equipment/ appliance cost of 10,000 SGD to 15,000 SGD. If you will be taking the lower end of the renovation cost and equipment cost of buying a unit at Eon Shenton, this is easily an additional 40K SGD worth of renovation cost you will be saving if you buy a unit from One Bernam.
Congratulations! If you’ve read to this point, you are probably really looking at buying a unit at One Bernam.
This is just a brief thought process on how I would go through with clients who are interested in buying a unit in One Bernam.
If you are looking at buying a 2 bedrooms 700 sqft high floor unit in One Bernam, I’ve already done for you 33% of the work. You can find out and do the same calculations for 2 other developments or units which are close to One Bernam with similar facilities to get a more accurate Gross Rent Multiplier and Cap Rate for One Bernam.
If you are looking at buying 1, 2 bedrooms (other layouts or other sizes), 3 bedrooms or the Penthouses in One Bernam, why not send me a WhatsApp message or a quick email via the contact form below and let me represent you in buying a unit.
There are several advantages when I represent you in buying a new launch
- NO COMMISSION REQUIRED. Probably the biggest advantage. If I sell this development, the developer pays me the commission, not you.
- Free Real estate investing report with calculations on your preferred unit will be done for you upon meetup. Not only will you have all the necessary information, I will also pass you all the floor plans, the images, the pricing and launch price discounts (if any).
- If you are looking to buy a unit for investment, I will research the best unit type this condo has to offer to provide you with the maximum returns from your investment money.
- If you are looking to buy for own stay, I will research and let you know the best floor level and direction facing and layout type within your budget to maximise your future sales price.
My obligation is only to you. You can look for me for advice for anything real estate related, any time and any day. I don’t work for One Bernam. I have no obligation to sell this development for them and therefore, I have no need to pressure you to buy this unit. If you want to buy, buy, otherwise, we move on and will look out for another unit that is more suited for your needs.
I am part of a team that is very strong in financial calculations. If you are really looking to buy, my team will find different ways and different means to make sure you will be able to afford it. Throw us questions and problems you are currently facing and which your previous agents are unable to answer, let us impress you with what we can do to get you your preferred unit
Buying a condominium (especially for a new launch) for anyone is most probably one of the biggest ticket purchase in their lifetime
Think of me as your friendly and knowledgeable real estate investor friend who’s doing you a favour to make sure the purchase of your new condo is really something worthwhile to purchase or at the very least, something that won’t lose you money in the future.
What are you waiting for? Let’s start!
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