My Thoughts on The Lakeshore

The Lakeshore is a 20 years old leasehold property developed by Far East Organization.

In recent days we saw successful enbloced leasehold projects like Lakeside Apartments and Park View Mansion just a stone throw away from The Lakeshore. These two enbloced projects works out to have a land rate of 1,023-1,077 sqft per plot ratio. The owners of these two enbloced projects, if we look at the latest transacted price, got back double or more of what they paid for. 

These up and coming projects, if we were to take into account the construction cost and how much LakeGrande and Lakeville are transacting now, their selling price will likely be around 1.7k psf or higher?

Do note, Lakeshore is right beside lakeside mrt hence a much better location than the two recent enbloc projects. The reason this region is interesting is because of the Jurong Lake District masterplan, can read more here. In short, there will be a Jurong Regional Line, A new science center, second CBD potential and alot of changes coming in a few years time.

The Lakeshore has the highest plot ratio in this region at 3.5x(hdb is only 2.8x) and also the biggest residential land size in the Jurong Lake region. How understated is Lakeshore compared to the other developments nearby? Based on the data provided by edgeproperty.

The Lakeshore:

GFA(sqm): 95,012

Total floors: 17

Total units: 848

Maximum number of 85sqm units: 1,118

Maximum allowed floors: more than 36 storey

This may mean Lakeshore is not fully maximized to its GFA. 270 more units can be added if its redeveloped, assuming all of the units are 85sqm. 

I am not 100% certain of this as its hard to find the full break down of Lakeshore's total units and sizing. But with the recent new trend of having 3 rooms at ard 85sqm or below, I would assume more money can be made by developers, especially when new development like LakeGrande and Lakeville are already selling at 1.6-1.7k psf.

Lake Grande:

GFA(sqm): 52,375

Total units: 710

Maximum number of 85sqm units: 616

The reason Lake Grande has more total units is likely because they have more smaller sized units in their mix.

Lake Ville:

GFA(sqm): 62,958

Total units: 696

Maximum number of 85sqm units: 740

Likely due to more large sized units in this project.

Another perk for Lakeshore is that it is within 1km to Rulang and Shuqun primary school. Rulang is the best primary school in the whole of Jurong with very strong demand from parents. So there is a school effect for its location. Parents want to rent or buy a unit there so that they can apply for these schools via phase 2C.

Do note that for Lakeshore, even though it has an excellent location and a large GFA, its a leasehold project and has remaining lease of 79 years. 

Despite of that, with the recent surge in rental rates, its avg gross yield is close to 4%. If we are conservative and base the implied rental yield on edgeproperty website of 3.4%. That means a full lease rental return of around 270% of current sell price. This means if you were to rent out the unit for the whole of 79 years and assume price to be at zero, you get back 270% of the current cost. Mcst and tax are not deducted from the equation yet. 

If we take a look at older projects like Parc Oasis which is developed by Wheelock, right beside Chinese garden mrt. It has 68 years of lease left(11 years older than Lakeshore) and the current average transaction price is still above 1k psf. So the price resilience of projects ard this region especially those close to mrt is quite strong.

Lakeshore is currently transacting close to its 2013 historical high at 1,269 psf.