The new launch market has been one of the most favoured segments of the real estate market. Singaporeans love the idea of being the first owner of a new home. Granted, the wait for home to finish building can be as gruelling as it is exciting, as you see your future home go from a patch of bare land to complete stack.
One of the perks enjoyed by new launch buyers is the Progressive Payment Scheme, which really helps buyers to manage their cash flow for mortgage payment as their property reaches completion. This financial aspect of new launches makes them particularly attractive to investors who are looking to sell the property after 3 years when the SSD no longer applies.
In this opinion piece, we will be covering an exciting new project coming to District 5. Terra Hill will be a new freehold addition to this area. Sporting a close distance to NUS and the greater Queenstown area, this project might catch the attention of local and international investors alike. For those who love this area and are looking for their forever home or legacy property, Terra Hill may be worth a closer look. We will be covering the basic details of Terra Hill and give you a quick run down on the pros and cons of the location.
The Basic Details on the New Launch
Terra Hill is located at 18 Yew Siang Road, in the Pasir Panjang area in the southwestern part of Singapore. It will take up the spot of the former Flynn Park condominium complex. Terra Hill will join the ranks of freehold condos in the Rest of Central Region (RCR). This city fringe area has been increasingly popular in the post-pandemic era, with prices appreciating handsomely in the past 30 months.
Pasir Panjang is home to several shopping malls that offer a wide variety of shopping, dining and entertainment options for residents and visitors. One of the most popular shopping malls in the area is VivoCity (10-minute drive from Terra Hill). This large shopping mall is known for its wide range of retail shops and restaurants, as well as its indoor and outdoor play areas for children. The mall also features a large rooftop terrace with a playground and a swimming pool, providing visitors with a unique shopping experience.
Another popular shopping destination near Terra Hill is the Alexandra Retail Centre, also known as ARC (5-minute drive away). Mapletree Business City is also only a 5-minute drive away. For residents or tenants that work in these office spaces, Terra Hill will be a very convenient location. The retail options in these areas also make for convenient shopping spots for Terra Hill residents.
Finally, the Holland Road Shopping Centre (15 minute drive) is a great place to find a variety of shops, including fashion boutiques, bookstores, and even a grocery store, all in one location. This mall is popular among locals and expats alike, and it’s a great place to pick up essentials or find unique gifts. Overall, Pasir Panjang offers a wide variety of shopping options for residents and visitors, from large malls like VivoCity to smaller centres like Holland Road Shopping Centre, allowing everyone to find something that suits their needs and preferences.
Terra Hill is located in a private residential neighbourhood, with most of the surrounding area inhabited by the affluent population in Landed homes, private condominiums and apartments. The vibe of the area is definitely more towards the quiet and peaceful end, with homeowners here enjoying a higher quality of life and degree of privacy. This area is particularly attractive to internationals and geographically mobile talents.
Terra Hill is conveniently located 400 metres from Pasir Panjang MRT station on the Circle Line, which is a 5-minute walk away. With almost a direct connection to the West Coast Highway, access to Tuas, Jurong, and City Centre is made simple and convenient via private transport. This convenience adds to Terra Hill’s appeal.
With most of the details to be released in February, the coming month, our opinions are based on the latest information available at the time of writing. Terra Hill will come as a low-rise five-storey condominium according to the latest sources. The unit distribution of condos in the area is around 50-66% of units under 1,000 sqft, with the remaining units being larger three to four bedders and exclusive penthouses. We can expect mostly small-medium units to be coming to the market with Terra Hill condo.
Terra Hill is estimated to hit the market with a total of 271 units, with its TOP date likely to be in 2026. Based on the land sale results and the prevailing market costs for the developers, the ballpark figure for Terra Hill would be around $2,300 psf to $2,500 psf. Do note that this is not the indicative price and is only an estimate.
One of its main appeals is its freehold status, which is especially valuable with its city fringe location. Owning freehold properties for investment purposes can help investors gain a strong rental yield without facing the risk of lease decay affecting the property value. While older properties do have higher maintenance costs, it at least doesn’t face the conventional worries of a decaying lease and not having a home to shelter later generations.
With the rental market as hot as it was in 2022, property investors with rental properties are benefitting not only from higher rental rates but also from much faster speeds of transactions due to the overwhelming demand for housing. We took a look at the implied rental yields of nearby condos and found that the average implied rental yield of Terra Hill’s area to be approximately 3.76%. Here is the breakdown below.
We can’t really talk about the rent without the tenant. Even for buyers who are interested in staying in this area, there are many important institutions and workplaces. Apart from Mapletree Business City, other key areas to look out for are the Singapore Science Park and the National University of Singapore. These areas are likely to be the workplace of future tenants. If you work in these locations, Terra Hill may also be worth considering if you’re not expecting any shifts in your workplace in the foreseeable future.
The Singapore Science Park is a premier science and technology park located near Terra Hill. It is a unique and important part of the Pasir Panjang area, as it is home to a diverse array of research and development, technology and innovation-based companies from around the world. The park is made up of four main clusters – Biomedical Sciences, Physical Sciences and Engineering, Clean Technology and Infocomm Technology – and is designed to foster an environment of collaboration and innovation among its tenants.
The park is equipped with state-of-the-art infrastructure and facilities, including research and development labs, incubation and acceleration facilities, as well as meeting and conference spaces. In addition, the park also offers a wide range of business support services to its tenants, such as networking opportunities, access to funding and talent, and business mentorship programs.
The Singapore Science Park is not only a hub for cutting-edge technology and innovation, it is also a place where companies, researchers and scientists can come together to share their knowledge and expertise. This helps to create a vibrant and dynamic ecosystem that drives innovation and growth in the region. The park is one of the key drivers of Singapore’s economic growth and is expected to play an even more important role in the years to come as the country continues to focus on building a knowledge-based economy.
Speaking of knowledge, the National University of Singapore (NUS) is one of the most prestigious and well-respected universities in Asia. Founded in 1905, NUS has grown to become one of the top universities in the world, consistently ranking among the top universities in Asia and the world. The university is located in Pasir Panjang, Singapore and is home to more than 43,000 students and 6,700 faculty members.
NUS offers a wide range of undergraduate and graduate programs in a variety of disciplines including Engineering, Medicine, Business, Law, Science, and the Arts and Social Sciences. The university is known for its strong research focus, with research centres and institutes dedicated to various fields such as biomedical engineering, environmental science, energy, and public policy. NUS has a reputation for producing cutting-edge research and has a strong track record in attracting research funding from various sources.
NUS has a diverse and international student body, with students from over 100 countries. The university encourages students to take advantage of the wide range of study abroad and exchange programs available, which allow students to gain valuable international experience. The university also has a thriving student life, with more than 200 student clubs and organisations catering to a wide range of interests, from sports and culture, to community service and entrepreneurship.
NUS is a key institution in Singapore’s education system and plays an important role in shaping the future of the country. The university continues to produce graduates who are not only academically excellent but also well-rounded and equipped with the skills necessary to succeed in today’s global economy. It is a place where students can not only acquire knowledge but also develop the ability to think critically, solve problems and make a difference in the world.
Terra Hill’s location seems to match knowledge workers in the science, technology, engineering and educational fields. With its premium freehold status in the city fringe area, this new launch could very well be coveted by many onlookers looking to make their home in the Pasir Panjang area.
What does Terra Hill’s MOAT Profile look like?
Moving forward to the MOAT Analysis, we take a more objective and well-rounded view of Terra Hill. Since this property is a new launch, we use 5 nearby condominiums and apartments by recency and similarity to see what Terra Hill would excel at. The MOAT Analysis compares different properties on 10 different dimensions to help us reach a fairer and more holistic view of the property in question. If you want to find out more about our MOAT analysis, you can read this article here.
The 5 nearby condominiums and apartments we have chosen are all freehold properties that are relatively newer in this location. They are 24 One Residences (24 units, completed 2019), Bijou (120 units, completed 2018), Mendon Spring (48 units, completed 2002), The Verandah Residences (167 units, completed 2021), and Treasure Place (54 units, completed 2006).
Taking the average of the MOAT scores of these five private properties, we estimate that Terra Hill would have a score of 61.6% on the MOAT Analysis. The core strength of private properties in this area is the Bala’s Curve, coming in at an average score of 5 out of 5. This is largely due to the freehold status of properties in this area. Next, the Quantum Effect score also has an average of 5 out of 5. This might be due to the smaller average unit size in this area combined with a slightly higher psf.
The Rental Demand score comes in yet again at an average of 5 out of 5. This echoes what we have covered earlier on the potentially large pool of talents wanting to stay in this area. Finally we have an average score of 4.2 on the MRT Effect. This is due to some of the other projects in the list of 5 that are located further away from the MRT station. Terra Hill should have a higher score given that the station is only around 400m away.
An important point to note is that Terra Hill has substantially more units available than these 5 comparables have on average. Terra Hill will bring a total of 271 units to the market. Compared to the other 5, the highest being The Verandah Residences with only 167 units. The average number of units between the 5 comparables is only approximately 83 units. Terra Hill will bring more than 3 times the number of average units to this area. This exciting number might likely move the market prices in this area. Existing property owners in this area ought to pay more attention to how this new launch might affect their property value in the very near future.
Overall, the MOAT Analysis indicates that Terra Hill suits a more niche market. Internationals, knowledge workers, property investors and the affluent population might be more interested in Terra Hill than the conventional market participant in Singapore. Although it has a much weaker score in Parents’ Attraction Effect, Exit Audience (HDB Upgraders), and Volume Effect, this niche market may not put as high a weightage on these factors so long as they do not have young children who are still schooling.
The Verdict for Terra Hill
Wrapping up this opinion piece, Terra Hill has a very distinct selling point. Clearly it is targeting a niche segment in Singapore’s property market. More specifically, property investors who are looking to buy a rental property or legacy property, international knowledge workers, and the affluent segment. Terra Hill would be more suitable for more mature family units with no young schooling children.
We have highlighted the more salient pros and cons of Terra Hill so that you can have a quick understanding of whether any of your personal deal-breakers come into the picture early, or if there are just some features that you are in love with.
Let’s get in touch
Terra Hill is estimated to have its show flat preview in the first half of February 2023. If you find Terra Hill attractive, or are curious to find out more about which new launches fit the bill for you in 2023, reach out to us here. Register your interest with us early so that you don’t miss catching the best units at this development. Thank you for reading and following PLB. Stay tuned for more regular updates on new launches in Singapore that are worth your time.