The Botany at Dairy Farm – An Affordable New Launch in the OCR?

PLB Editorial Team

January 15, 2023

Table of content

2022 has been an exciting year for New Launches in Singapore. Quite a number of New Launches had a superb performance on the weekend of their release and went close to selling out. Arguably, the most successful new launch was AMO Residence, which sold 98% of its units on the first day of launch. Lentor Modern was another favourite, with 84% of its units sold during its launch weekend. These stellar performances in 2022 have left buyers, agents, and developers alike wondering if 2023 would be as excellent a year for new launches.

Despite a year full of interest rate hikes, the new launch market doesn’t seem to be backing down. The market has accepted higher prices for new launches and buyers seem to be happily snapping up units. The property market seems to be cautiously optimistic still, and time will tell how the market responds to the cooling measures put in place in 2022.

In this opinion piece, we will be covering the anticipated new launch in the Outside Central Region, The Botany at Dairy Farm. We will discuss the basic details of the project and its MOAT profile. Following which, we will summarise the rough pros and cons of the project based on the information we have on hand. You can also look forward to our follow-up article once more details on the project are released.

The Botany at Dairy Farm

As its name suggests, The Botany will be located between Dairy Farm Walk and Dairy Farm Lane. It will be located directly north of the German European School Singapore, and between The Skywoods and Dairy Farm Residences (expected TOP in Q1 2024). In the immediate vicinity, Dairy Farm Mall will provide most of the amenities needed for residents with its 40,000 sqft of retail space. This mall is the retail space found in the Dairy Farm Residences mixed development.

The OCR has been a popular choice for buyers looking for a mix of affordable and peace & quiet, with plenty of room for upside appreciation in the coming years as opposed to more expensive regions closer to the city centre. In the larger Bukit Panjang area, there is a great mix of landed and private estates. Families from different backgrounds who wish to stay near their parents in this residential area in the central-western part of the island will find Dairy Farm to be a favourable location.

The expected TOP date for The Botany at Dairy Farm is around the end of 2027 (Q4) to the start of 2028 (Q1). With an estimated total number of 386 units, this medium-sized development will be an interesting addition to the new launch scene. Tentatively, the project is looking at a good unit mix of 64% being 3-bedroom and larger and 36% being 2-bedroom or smaller. This unit mix may change when details of the launch are finalised. At least buyers hoping to get larger, family-sized homes can look forward to what this project has to offer.

Based on the current state of the new launch market, in combination with the estimated land costs and other business expenses, the ballpark figure for The Botany at Dairy Farm is a price of around $1,800 to $2,000 psf. This number is speculative and will be revised in our upcoming article on The Botany once more information is made available. For reference, many of the new launch projects in 2022 have been priced around the approximate average of $2,100 psf, albeit in more centrally located areas.

The present market for new launches is still considerably hot. While most market participants are expecting a slowdown in the property market in 2023 due to market conditions and cooling measures, the combination of pent-up demand and shrinking supply tells us that prices may continue to edge up into 2023.

The Botany will be located in the larger Bukit Panjang area. Bukit Panjang is a residential town located in the west of Singapore. It is known for its mix of public and private housing, as well as its ample green spaces and parks. The town is well-connected, with the Bukit Panjang LRT line and several bus services running through the area. Bukit Panjang Plaza and Hillion Mall are popular shopping destinations, and the town is also home to the Bukit Panjang Community Club and the Bukit Panjang Public Library.

The nearest MRT station to The Botany is Hillview (800m away) on the Downtown Line (Blue Line). Hillview MRT is around a 10-15 minute walk away from The Botany. For families who drive, The Botany offers almost a direct connection to the Bukit Timah Expressway (BKE), which subsequently connects to the Kranji Expressway (KJE) for residents working in the west, and the Pan-Island Expressway (PIE) for residents working in a more central location.

With plenty of malls and nature spread over this district, Dairy Farm Mall (which is expected to be completed in 2024), The Rail Mall and HillV2 (1km away) are nearer options for residents in the Dairy Farm area. This presents a wide range of different cuisines with some cafes in the mix, with no shortage of variety for residents in this area.

This locale also houses some of the best nature and exercise spots on the island. To the south, we have Dairy Farm Nature Park, which is part of Bukit Timah Nature Reserve, a Singapore favourite when it comes to green spaces. The nature reserve also houses three old quarries that you can stroll by in the evenings. To the east, we have Chestnut Nature Park, which offers another green space as a change of pace for residents who exercise regularly.

On top of these green spaces, The Botany is also located very close to the Rail Corridor Central. This gives cyclists and walkers access to the Rail Corridor, reaching all the way through Buona Vista to Tanjong Pagar Railway station. This gives the Dairy Farm area added appeal when it comes to the quality of life in the area.

According to the 2019 Draft Master Plan by URA, residents in the Dairy Farm location can look forward to more residential developments, a new park connector and an upcoming ABC waters project. Generally, the development plan for the Bukit Panjang area still focuses on improving the quality of life for residents and adding amenities and more green spaces to improve the state of this residential district.

If these new plans for Bukit Panjang aren’t exciting enough for you, take a look at the current plans for the area. With plenty of educational institutions (marked as E) and residential spaces (marked in orange), now present and planned for future development the appeal of Dairy Farm as a residential estate will slowly grow with time as it matures.

The Botany carries with it a name that suggests a curated green look and vibe. Prospective buyers may look for a cool and eco-aesthetic design when it comes to the theme of the property. We are speculating that hopefully this green and eco-friendly theme will pull through with future-proofing technology and carbon-neutral designs.

Even as it is, this locale presents more popular green spaces than most other private housing. Its location will be more appealing for family units that are more active. Granted, the TOP of this project is sometime late in 2027 or early in 2028, we might see more and more developments pop-up within the next four to five years. This availability of presently undeveloped space in the area gives The Botany a better shot at future appreciation as future developments might be priced at a much higher level due to inflationary pressures and rising costs.

What does The Botany at Dairy Farm’s MOAT Profile look like?

PLB’s MOAT Analysis takes a holistic approach in looking at the value of a property. We compare multiple properties over 10 different aspects that might affect its value and take a more balanced approach when it comes to whether this property might be appealing to the mass market in Singapore. You can read more about our MOAT Analysis in this article here for a more in-depth explanation of our tool.

Before we jump into the analysis, we will highlight some of the other condominium projects to which we will use to approximate the MOAT score of The Botany. We will use five condominium properties based on its location and recency of development. These condos are: Dairy Farm Residences, Midwood, Foresque Residences, The Skywoods, and Eco Sanctuary. All of these condos are 99-year leasehold condos, similar to The Botany.

An important thing to note if you’re looking at the difference in psf across the projects, is that these properties have a considerable difference in TOP dates and distance to the MRT. The Skywoods and Eco Sanctuary TOP in 2016, Foresque Residences in 2014, and Dairy Farm Residences & Midwood likely in 2024. This is something to keep in mind as we go through the MOAT Analysis.

Based on the MOAT Analysis, the approximate MOAT score of The Botany comes to around 62%. This is considered a decent performance. We can see from a glance, what the main points of appeal are as well as some of its not so attractive points. Naturally, new launch condos will do well in its Bala’s Curve Effect score due to its newness and high remaining lease. Likewise, with Volume Effect, the condo will experience a high volume of transactions during the period of the launch.

For The Botany, the three main points that stand out are Exit Audience, Quantum Effect, and Rental Demand, in the order of potency. Exit Audience scores a high 4.2 out of 5. When it comes to its attractiveness to HDB upgraders and Condo buyers with families in the Bukit Panjang area, The Botany is likely to shine. With a good amount of public housing in the area to provide an upgrader demographic, The Botany should not find itself short of an exit audience by the time it comes to its TOP date.

Next, the Quantum Effect score is relatively high, coming in at an average of 4.2 out of 5. For the average Singaporean family unit, this would mean that the property is still a relatively affordable option, even as a new launch. With added assistance from the Progressive Payment Scheme for new launches, this will help with cash flow when it comes to servicing the mortgage as the home is under construction.

Finally, the Rental Demand in this area is decent, coming in at an average of 3.66 out of 5. We exclude Dairy Farm Residences and Midwood on this dimension as they are still under construction and do not have any data on existing rentals. This fact coupled with the hot rental market in 2022 might see a continuation of a favourable market situation for investors and landlords looking to go for rental properties.

Some points to note, however, for prospective investors and buyers are the relatively lower scores on the Disparity Effects (Region and District), MRT Effect, and Parents’ Attraction Effect. First, for the lower disparity scores, these scores indicate that there might be more affordable (but potentially less accessible) resale options when it comes to private properties in the district and region. This is reasonable, considering the size of district 23 (which includes Choa Chu Kang) and the western region. The low disparity effect score might be a reflection of The Botany’s location on the fringe of D23 which is closer to the central area.

Next, the distance from the MRT is noteworthy. Most Singaporeans might shun a 15 minute walk to the train station. Others might look at it as a good morning workout to hit the steps goal for the day. Nonetheless, buyers will need to have a wet-weather plan in effect to make sure that rainy days don’t affect their daily commute. Families with cars would more likely favour this project due to its close proximity to the BKE.

Coming to the point of the Parent’s Attraction Effect, there are fewer schools located in the 1km vicinity of The Botany. The ones catering to a conventional local audience being CHIJ Our Lady Queen of Peace (Primary School) and Bukit Panjang Primary within 1km, and Fajar Secondary located slightly further north (1.5km away). Other schools include German European School Singapore (GESS International School), and Assumption English School. The close proximity to GESS might give The Botany an added appeal for expats looking for a place near their child’s school. If we expand our search, we can find Bukit Panjang Primary and Fajar Secondary.

The Verdict for New Launch

Wrapping up this article, we will bring together some of the pros and cons of this project to give you a view of whether or not this property fits your needs as a family in a glance. Property is definitely not a one-size-fits-all solution. It is a special home for your family. Your next property purchase for residential use should take this into careful consideration.

Looking at The Botany launch, this project seems to fit more mature and active family units who love nature. It would also delight some profiles of international families who are looking for a convenient location for their schooling children. Families with a car will also find this property a more convenient choice. On the flip side, families who have an immediate need for a home, or rely on public transportation for their daily commute are more likely to view this property with less favour.