My thoughts on Glendale Park

Beginning of last year, I and my wife decided to purchase a 1,033 square feet unit at Glendale Park. It is currently still being rented out, but we plan to move in sometime next year. It is beside Hillview down town line which is just four stops away from my son's future Primary school. Here are the reasons why we bought it.

Glendale Park sits on a 285k square feet of squarish freehold land. It is a 20 years old condo joint developed by Far East and Capitaland. With 448 units, if we divide against the land size, it gives each owner a rough estimate of around 600 square feet of real land each. This means the development is decent in size and units to land ratio is small due to low rise build up(maximum 10 levels). This may mean its GFA(gross floor area) is not maximized yet and a potential enbloc could happen in the future.

Glendale Park has a plot ratio of 1.92x, with the potential to be revised to 2.8x as seen from other new condominiums just beside it. The freehold status prevents land value depreciation overtime which means the principal land cost will be pegged more closely to inflation. I think its a good feature for own stay.

Glendale Park is just 50 metres away from the train station, fully sheltered. This means it is the nearest condominium to the train station among all other condominiums there. We bought our unit for $1,147 psf, which I feel gives a margin of safety compared to the new developments nearby.

The recently launched Midwood by Hong Leong(shown on the map) is a 99 years government land sale and its transacting at $1,535 to $1,748 psf range.

The Hillier by Far East Organisation launched in 2012 is also a 99 years government land sale, just beside our condo. It is transacting at $1,280 to $1,394 psf range.

There is currently a substantial price disconnect between the new 99 years leasehold and the old freehold development. Do note besides the leasehold and freehold difference, Glendale location near the train station should factor in some premium too. If it rains, I can walk out from the back gate to the train station without using an umbrella or crossing the road. It should also increase rentability due to convenience.

Interior of my unit currently tenanted

The units in Glendale Park is tricky. There are some units with double volume ceiling and/or  balcony. These units do not show the true livable space because they eat into the advertised square feet(feels smaller). I prefer to maximize my functional livable space and hence I choose a unit with no balcony and no double volume ceiling. Its a two plus one study with three toilets if we include the kitchen toilet. The kitchen is also enclosed which I feel is quite rare especially for new launches nowadays.

Catalyst

1) With the recent drop in Sibor and FHR, home loan rates by DBS and other banks are becoming more attractive. Cash is becoming cheaper. This might mean more potential buyers.

2) A suppressed $psf can be normalized via organic demand(more people buying because its cheaper relative to the other condos nearby. It can also be unlocked via enbloc in the future. As of today, transactions of Glendale Park from Jun 2019 to March 2020 shows a range of $1,206 to $1,277psf. Majority including the one in March are high floors(6 to 10) though.

3) Plot ratio revision from 1.92x to 2.8x would increase enbloc probability in the future.

4) Removing of some cooling measures due to Covid19


Risk

1) Covid19 pandemic will likely increase unemployment and decrease the number of property sales.

2) Property prices are laggard to our economy. Prices may drop just like during the Sars period.

3) More force sale after the 8 months loan deferment could potentially cause property prices to tank if the pandemic is still not resolved.

4) Increase in vacancy rate due to reduction in foreign pmet and employment pass holders, this will cause rental rates to weaken and ultimately property prices to drop.