If you purchased property in Jurong three decades ago, the reaction then would be either amusement or pity on how you could have made an unwise decision. During the 80’s, the Jurong area was very underdeveloped characterized mostly by industrial machinery, dusty trucks, and a smog-filled atmosphere.
And how about Paya Lebar? Does anyone even remember what it was like 30 years ago? One could even make a joke that the Singapore government probably forgot that this area even existed! Even as recent as the 90s, one could hardly think of any recreational activity that one can do in Paya Lebar other than dwell on how boring the place was.
The point is, both Jurong and Paya Lebar were practically non-existent. However, when plans for business hubs came along, these two suddenly made some blips on the property market radar.
Looking outside of the CBD
The Urban Redevelopment Authority (URA) makes no secret of its master plan for Singapore. This is openly displayed in their building close by the Maxwell Road coffee shop. If you are thinking of investing in property, consider this your blueprint.
It is indicated in the master plan how particular areas in Singapore are to be developed. For example, Lim Chu Kang is currently known for its huge cemetery. According to the plan, this area will be an agricultural area in the future. Due to the land being already fertilized, perhaps? Can someone find out URA’s official reason?
Morbid jokes aside, shift your attention to the master plan’s intentions to make hotspots out of Jurong and Paya Lebar. Both areas are slated to be business hubs alternative to the Central Business District (CBD). Decentralized business areas are expected to ease congestion in the commute to the CBD as there would be lesser number of workers rushing off to get a spot on the train at the same time.
With this, which of the two has the edge in terms of opportunities for investments?
Jurong is slated to be the largest business hub outside of the Central Business District with an estimated office space of 500,000 square feet, and half as many F&B and entertainment outlets. There will also be 1,000 residential units to be built a few minutes’ walk to the Jurong East MRT. The plan also includes the Jurong Lake project which is intended to improve on the existing view. In the past, the view mostly consists of wildlife dying from industrial pollution.
The prices of existing prominent condos in the area such as J Gateway indicate that overall prices are moving towards a favorable direction. Based on URA transaction records, the average price at J Gateway in 2013 was around $1,537.50 per square foot. Currently, this property, which is expected to TOP next year, goes at $1,665 psf which translates to an overall gain of 8.2%. Considering how the current property market is down at the moment, investing in Jurong will be a good move.
Jurong has several factors on its side: the High Speed Rail (HSR) terminus, the Jurong Innovation District, nearby tertiary education institutions and research hubs, and a cluster of high profile shopping centres.
- High Speed Rail Terminus
It was announced on May 11, 2015 that the High Speed Rail (HSR) terminus which is slated to be completed in 2020 will be housed in Jurong East.
Having the HSR in Jurong is important as there are around 350,000 Malaysians working in Singapore. Once the HSR terminus is operational, these workers will most likely rent condos in the area since this means more convenient to travel back home. Demand for entertainment and other commercial spaces is also expected to rise from the increased foot traffic brought by the HSR.
- Jurong Innovation District
Announced during the Budget 2016, the Jurong Innovation District is a next-generation tech park which will house manufacturing establishments as well as those in the field of Research and Development. The area’s close proximity to research hubs and universities will encourage better collaboration in the field of science and technology. With this, it is expected that bringing in new breakthroughs will be encouraged.
The Jurong Innovation District is expected to be finished in 2022, and is seen to drive up rental demand as well. It is recommended that prospective landlords take action sooner than that since they HSR will already be up by then, which means prices would have risen as well.
- Educational Institutions and Research Hubs
Jurong Gateway is located nearby educational institutions such as the University of Singapore and Nanyang Technological University. While there are existing dormitories in these universities for foreign students, competition is tight as slots in the dorms are limited.
There is a market for students seeking to rent living spaces close to their university especially Singaporeans who live in the east who wish to reduce the commute to and from school. These students often don’t get a place in the dorms as preference is given to foreign students. Prospective landlords may want to look into this opportunity as well.
- High-profile Shopping Centres
Major shopping centres like IMM, JEM, and Westgate Mall are located nearby which add to its attractiveness to tenants and owner-occupiers. Living in the area means having your favourite restaurants and brands, such as Uniqlo and Fish & Co, right at your doorstep.
Another nearby attraction is JCube, the first Olympic-size skating rink in Singapore, which is located near the Jurong East MRT.
There are 12 hectares of land to be developed in Paya Lebar with an allocation of around 500,000 square metres of commercial floor space. The heart of this development will be Paya Lebar Central (PLC), which is going to be attached to the Paya Lebar MRT. PLC will have three blocks of office space, as well as mixed use space for commercial establishments and serviced apartments.
Also across the Paya Lebar MRT is the SingPost Centre which is currently under a $150 million renovation phase. Upon completion, it is expected to be Asia’s biggest e-commerce mall.
The spotlight has somewhat shifted from Paya Lebar due to aggressive announcements about the Jurong development. However, it doesn’t mean that there’s nothing here for investors. In 2013, Le Crescendo and other properties along Paya Lebar Road had a price range of $1,200 to $1,400 psf. At present, Paya Lebar Residences is the only available listing within range of PLC and it goes for about $1,181 psf. Since 2013 to the present, prices in the area have remained steady.
Investors looking into Paya Lebar may take note of the following factors: proximity to the current CBD and the airport, close distance to Sims Avenue and Tanjong Katong Road, Paya Lebar Central, and timing.
- Proximity to the main CBD and the airport
Only ten to 15 minutes away from the main CBD and the airport, Paya Lebar already owns this edge over Jurong. The spill over from the CBD is basically a done deal as companies will move to Paya Lebar with its comparatively lower rent – something that prospective landlords might want to take into consideration.
While the current situation wherein Paya Lebar office spaces are showing dismal occupancy rates – for example, Paya Lebar Square is half-empty despite being sold out when it launched – this is expected to pick up once PLC opens.
- Close distance to Sims Avenue and Tanjong Katong Road
Prospective residents will also find the close distance to Sims Avenue and Tanjong Katong something to get excited about. These areas have many of Singapore’s best restaurants and eateries. The foodie scene here is vibrant especially with hipster cafes sprouting all over the place. Access to these amenities will be attractive to owner-occupiers especially as these areas don’t have the overcrowding that often happens in Queenstown and the Orchard area.
- Paya Lebar Central
Paya Lebar Central will be the main attraction in this business hub development. Once it’s up and running, tenants who will either work or live, or even do both, in the area are expected to come in numbers. PLC is developed jointly by Australian developer LendLease and through a sovereign fund from Abu Dhabi. The former already has an established track record in Singapore with Parkway Parade and Orchard Central.
Full completion of the Jurong development is expected to be in 2020 or even later. That’s a lot of time from now and a lot can happen in between. In contrast, the Paya Lebar Business Hub’s target completion date happens this year, with the construction work done near the MRT station already apparent (although some of the big developments may be ready only in 2018 though). Investors who wish to do business closer to the present instead of some far off date in the future would be more inclined to place their money here instead of Jurong.
Who’s the winner?
While Jurong seems to have more to offer, the fact that Paya Lebar is sometimes underestimated means that there might be hidden opportunity with the latter. It is also a possibility that with too much hype surrounding the Jurong development, the whole project might implode on itself. In fact, it is possible that prices have more than factored in with the High Speed Rail terminus and Jurong Innovation District.
To conclude, don’t risk overlooking what Paya Lebar has to offer – have a closer look here on this upcoming project.