Urban Vista Review: Analysis of Investment Potential

Urban Vista is launching soon on Friday. I personally think that Urban Vista is a great choice for those looking for investment properties. Here are 4 reasons why:

Good Potential Rental Income

Let’s do a conservative calculation of potential rental yield for a 1 bedroom unit here. 1 bedrooms here start from $6xxk, but we’ll round it way up to $700,000. Based on actual transaction prices for the Optima, the condo next door that just TOP-ed last year, we should be able to get at least $3,200 per month in rent. This is a conservative estimate, as I have personally encountered 1 bedroom units at the Optima rented at higher prices. Taking the annual rental income divided by the price of the unit, we get a yield of about 5.5% per annum. That’s a pretty healthy number that would beat many other investment options out there.

Excellent Location next to Tanah Merah MRT

Tanah Merah is an exclusive, highly residential area. Yet, it is an important transport hub, with the Tanah Merah Interchange MRT station acting as a gateway to Changi Airport and Changi Business Park/Singapore Expo. Singapore’s latest university, SUTD, will also be located close by, providing a potential pool of tenants ranging from students to young professionals, pilots and air stewards/stewardesses. Tanah Merah will be 1 station away from the future Downtown Line (connecting at Expo station) and 2 stations away from the future Eastern Region Line (via the Downtown Line extension at Expo). The plot of land next to Urban Vista has also been designated as a future commercial hub, bringing the convenience of shops and eateries to the doorstep of residents.

Competitive Pricing Compared to Other New Developments Nearby

Indicative prices for Urban Vista range on average from $1,300 to $1,500. I believe that this is very competitive when compared to the other new developments coming up within 5 minutes’ walking distance of the Tanah Merah MRT. One such development is across from Urban Vista (on the other side of New Upper Changi Road), a 343k sqft plot of land that was purchased by Keppel Land for $434.6m last year. Analysts estimate the break-even price to be about $1,200 psf (source: OCBC Investment Research, 24 Jan 2013). Thus, we can expect that the price of the new development to be equal to or higher than Urban Vista, although Urban Vista has a more advantageous location just next to the future shopping mall.

Spacious Loft-Style Design

Another bonus in Urban Vista is the loft concept interior layout. Double volume ceilings will bring more natural light into the units and give a feeling of spaciousness, while the raised furniture deck that holds the bed frees up extra space below for a home office or additional living space. This translates into extra value – more living area for the same psf price (the furniture deck is not counted towards the unit area). If you were to buy a 1 bedroom unit, you would effectively be able to use it as a 1+study.

What are your thoughts? Please feel free to comment or contact me for a discussion.