A review on whether or not Parc Clematis 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||September 2023|
|Address (Multiple)||2 – 20 Jalan Lempeng|
|Number of Units||1468|
|Bedroom(s) Type||1 – 5 Bedrooms Available|
|Excellent for||Both Family and Investment|
|Worst Case Scenario Pricing||946,161.80|
|Average Case Scenario Pricing||Contact Me|
|Best Case Scenario Pricing||Contact Me|
URA Masterplan 2019 for District 5 and Parc Clematis
Multiple developments are set in the URA Masterplan 2019 for the West Region. Namely, Jurong Lake District (JLD), Jurong Innovation District (JID) and the Tuas Port. All three factors that will affect the property prices in the West. Of the three, the most important for Parc Clematis would be the Jurong Lake District which will be the closest.
Jurong Lake District
A 360 hectares (About the size of 500 soccer fields) district is slated to be the next biggest commercial and regional centre outside of Singapore main central business district. This district will be developed with space for 20,000 homes and 100,000 new jobs.
There will be 3 MRT Lines serving this district. The current North-South Line and East-West Line already exists with the upcoming Jurong Region Line slated for completion in different phases from 2026 – 2028.
The high speed rail link to Kuala Lumpur will also start from here.
Jurong Innovation District
Jurong Innovation District is even larger at 600 hectares (840 soccer fields) and is divided into 5 precincts with 6 stations from the upcoming Jurong Region Line slated to serve this district.
|Nanyang Technological University||for Research and Development|
|Tengah||Future Development (Not known yet)|
|CleanTech Park||For Advanced Manufacturing and R & D|
|Bahar||For Advanced Manufacturing and R & D|
Jurong Innovation District will also be home to startups of the manufacturing sector. There are already 6 well-known manufacturing brands preparing to set up their factories in JID.
The six are
|Siemens||Supplier of systems for power generation and transmission|
|Flowserve||Supplier of industrial and environmental machinery|
|Bosch Rexroth||Manufacturer of industrial and mobile equipment|
|A*Star||Specialist for Integrated Services Digital Network|
|National Metrology Centre||Research Developer for Advanced Technologies|
A very promising developing district for Jurong.
Tuas Mega Port
Singapore is a leader in the maritime industry and looks set to retain and further enhance its reputation by the introduction of the Tuas Mega Port by 2040.
Tuas Mega Port was set up to consolidate the current 5 ports located all around Singapore, namely Tanjong Pagar, Keppel, Brani, Pasir Panjang Terminal 1 and Pasir Panjang Terminal 2. This will reduce inter-terminal travelling time and cost which is currently happening now between these 5 terminals.
With the construction of this Tuas Mega Port, this industry is expected to grow further, contributing more to the current 7% of Singapore’s GDP growth and employing more than the current 170,000 workers in the maritime industry.
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.
With the introduction of the 3 districts in the west region, this is certainly very good news for Parc Clematis.
Also, Trilinq which we will be comparing for the calculations below, is another leasehold condominium that was launched in 2013 and recently completed in 2017. It is already showing good growth rate and healthy transacted records both in sales and rent. This will be elaborated further below under the calculation section.
Based on my research above and the calculations below using proper real estate investing formulas, Parc Clematis is a very good buy for both families and investors.
The next section will be on the calculations using Real Estate investing formulas. If you are interested to know more about Parc Clematis 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 Parc Clematis and how you would apply real estate investing research, principles and calculations before buying a unit in Parc Clematis for real estate investment purposes.
The unit we will be analysing will be for a 1 bedroom Unit, preferably Mid floor (8th – 10th floor) and also be comparing it with Trilinq 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, and I’m sure that by now there are many other websites that are covering it and also not to mention the real estate agents that are stationed at the Parc Clematis’s show flat who will have that information readily available for you to look through.
Also I will only be comparing only one unit from Trilinq, which is not the usual practice. For clients interested in Parc Clematis Condo, I will usually compare 2 more units (Faber Crest (900m away) and Seahill (1.9km away)) or based on which other development my clients want me to do the research on.
Sing-Haiyi Gold Pte Ltd bought over the former Park West Residential site land for SGD 840.9 Million which works out to be around SGD 850 PSF.
Sing-Haiyi Gold Pte Ltd is a real estate developer which has a property development presence in Singapore as well as in the United States. It has also a 3.08% stake at Cromwell Property Group in Australia and 25% stake at ARA Harmony Fund III which deals with commercial properties in Malaysia. Apart from Parc Clematis, its other notable residential developments in Singapore includes uncompleted properties like the Gazania (How Sun Drive) and Lilium (How Sun Road) and completed properties such as City Suites at Balestier, The Vales (Seng Kang), [email protected] (Tampines).
|Developers Involved||Sing-Haiyi Gold Pte Ltd|
|No of Residential Developments in Singapore (Uncompleted)||4|
|No of Previous Residential Developments in Singapore (Completed)||4|
|No of Overseas Developments||3|
Comparison between Parc Clematis and Trilinq
|Launch Sales Price (psf)||1532||1650|
|Present Transacted Price (psf)||1722||1650|
Calculation of Growth Rate (For Trilinq and General)
My research shows that in 2013, the transaction record for the following 1 bedroom unit at 28B Jalan Lempeng (#08-XX), 700 sq ft at Trilinq was as follows
Transacting at 15 April 2013 – 1532 psf
Transacting at 14 May 2018 – 1722 psf
Time Period: 61 Months (To be rounded down for calculation purposes)
The annual growth rate for Trilinq would be estimated to be around 2.30%. 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 3 units from 3 different developments 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 RCR (Rest of Central Region) based on stats from March 2010 to March 2020 is 4.40%
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. Parc Clematis will only be completed in 2023 and will be 6 years newer than Trilinq by then. See more in the conclusion section
Gross Rent Multiplier
The Gross Rent Multiplier Formula for Trilinq for a 1-bedroom unit is as follows
GRM = Sales Price / (Annual Rent of Unit)
= 1,205,000 /(3175 x 12)
= 31.6273 (Rounded to 4 decimal space)
With the following assumptions taken
- Sales Price of 1,205,000 SGD taken for the unit #08-XX 1 bedroom which was sold on 14 May 2018
- Assumption of Annual Rent of 3175 SGD taken as an average for the year 2019 (No stats given for the floor level, lowest was 2550 SGD/ Month on 1st June 2019 and highest was 3800 SGD/Month on 1 March 2019).
Income Capitalisation Method (Modified)
Using the Income Capitalisation Method Formula, the Cap Rate for Trilinq 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
= (38,100 – 3972 – 120 – (300 * 12) – (2 * 3175)) / 1,205,000
Assuming the following
- Expected Maintenance and Repair is 0
- Maintenance Fee for Trilinq is assumed to be 300 SGD
Calculation for Parc Clematis using Cap Rate and Gross Rent Multiplier
Using Gross Rent Multiplier for Parc Clematis
For the assumption of rent for Parc Clematis, there are 2 ways to go about it.
- Parc Clematis 1 Bedroom plus Study unit is 506 sqft. Using 506/700 x 3175 = 2295.07 SGD
- Using Property Guru and finding out the average rent for a 1 Bedroom plus study with the following filters used
- Residential Type Condo
- Within 1km to Clementi MRT
- Less than 750 sqft
- 1 Bedroom + 1 Bath (Study option not available)
We get average of 2350 SGD
2100 SGD/Month (1st May 2019) and 2600 SGD/Month (1st March 2019) for Trilinq (538 sqft and 560m from Clementi MRT Station)
For the worst case scenario, let’s use 2295.07 SGD/Month
Using the GRM of 31.6273 to find the sales price for Parc Clematis
Sales Price = 31.6273 * (2295.07 * 12)
= 871,043 SGD (Rounded to whole number)
Using Income Capitalisation Method for Parc Clematis
Market Value for Parc Clematis = Net Operating Income / Cap Rate
= (Rent Income – Property Tax – Property Insurance – Annual Maintenance Fees – expected Maintenance and Repair – Vacancies Loss)
= (27,541 – 2754 – 120 – (300*12) – 4590.14) / 0.02
= 824,309 SGD (Rounded to whole number)
Where the following assumptions are made
- Maintenance Fee is 300 SGD (To be updated once developer releases the information)
- Expected Maintenance and Repair to be 0
So judging from the calculations above, what would be an acceptable and fair price for Parc Clematis to be sold at? Always remember, the formulas we are using are originally used for existing properties which are similar in age and with rental prices already available. We know this is not the case as Parc Clematis will only be ready in 2023.
In addition, we need to also consider the following points
- Parc Clematis will be 6 years newer (2023 – 2017) than Trilinq.
- The estimated rent we are using is of the worst case scenario at 2295.07 SGD. What do you estimate the rent will be in 2023 for this area with the knowledge of the URA Master Plan 2019 and what is being planned for the next 20 years?
- Trilinq average rent is already transacting at an average of 2350 SGD. There are massive development plans for Jurong as mentioned in the first part which will play a huge part in increasing the rent.
- Parc Clematis will be using smart home technology 6 years newer than Trilinq
- Buying a unit at Trilinq instead would require renovation cost which can cost upwards of 10,000 SGD to 20,000 SGD and equipment/ appliance cost of 3,000 SGD to 7,000 SGD. If you will be taking the upper end of the renovation cost and equipment cost of buying a unit at Trilinq , this is easily an additional 10K SGD worth of renovation cost you will be saving if you buy a unit from Parc Clematis.
Congratulations! If you’ve read to this point, you are probably really looking at buying a unit at Parc Clematis.
This is just a brief thought process on how I would go through with clients who are interested in buying a unit in Parc Clematis.
If you are looking at buying a 1 Bedroom plus Study unit, I’ve already done for you 33% of the work. You can find out and do the same calculations for 2 other developments which are close to Parc Clematis with similar facilities to get a more accurate Gross Rent Multiplier and Cap Rate for Parc Clematis.
If you are looking at buying a Studio, 1-Bedroom (other layouts), 2-Bedrooms, 3-Bedrooms unit, 4-bedrooms or 5 bedrooms unit, 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 home living, I will research and let you know the best floor level and direction facing to get to maximise your sales price. Basically, I will study these units and provide you with the highest chance of increasing the future capital appreciation potential of your unit
- 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 Parc Clematis. 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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