Clavon vs Ki Residences: Lessons from other launches

At the end of circuit breaker, I somewhat expected sales to rebound.

After all, there’s real pent-up demand on the market I could sense on the ground.

September’s launch of Penrose was nevertheless surprising…

With more than 60% of units sold in a single day.

Was this a sign of things to come for Real Estate in Singapore?

I looked back at Penrose to analyze the reasons why it sold so well.

Then, it was a quiet October.

No new launches perhaps?

Till last weekend, (14 Nov), came this:

Well done again! 

To the developers and sales agents who made The Linq a near sell-out on day 1.

If I really really had to pick on something… because no one likes to hear only the good stuff right…

96% of 120 units, it’s an easier sell than 96% of 500 units.

Scarcity factor definitely strong there.

So, once again, I did an analysis. This time, presenting my objections to be answered by one of the onsite experts from marketing agency PropNex.

Referring back to the news article, a quote says: ‘the property market is highly sentiment driven’.

Here’s what the market sentiment seems like now for the most part:

  1. Interest rates are low
  2. The worst is behind us
  3. We are nearing a vaccine for Covid-19
  4. Waited for so long yet prices didn’t even fall!

Add to that the strong results from projects like Penrose and The Linq…

(Yes, I know Hyll on Holland launched to only 4 units sold, but that’s a totally different segment of the market)

And you get developers lining up their launches to ride the hype train.

So in December, we anticipate 3 new projects coming into the market: The Landmark, Ki Residences, and Clavon.

Of which I’ve picked Ki Residences and Clavon to analyze deeper in this piece.

Why?

If you’ve followed me for a while, you may notice I write many things about the west.

In particular, a previous article about Clementi HDBs was very well received.

I’m a west-sider myself, so you can say there’s an emotional connection 😊

Hope I can value-add you with my own insights on these projects.

Do you realise that we are now way past the oversupply fears in 2018?

And that Ki Residences and Clavon represent some of the last projects confirmed to launch in the West?

Thus, if you’ve been waiting patiently these couple of years for all the en bloc & GLS sales to launch, this is it.

You can compare it all now… so keep reading!

Disclaimer: I am not a marketing agent for Ki Residences or Clavon, and the views below represent my own only, without inclination towards any project or marketing agency. However, I do have strong relations with personnel from both projects and can represent you for your purchase at the same direct developer pricing.

If you find my insights useful, do consider supporting me by contacting me to assist you with your purchase decision.

Learn more about me, or drop me a message directly here.

Hindsight does have its benefits.

I’m able to connect the dots to see what are the primary factors leading to strong sales.

And see whether what happened in Penrose and The Linq can be repeated at Ki Residences and Clavon.

With that in mind, I’ll be evaluating both the latter projects based on the following factors:

  1. Demand & Supply
  2. Hype
  3. Uniqueness
  4. Future Potential
  5. Price

I wont be going through the projects basic information here, so if you’ve not got that yet, click the project names below to access the files and follow along!

1. Demand & Supply

Situated in the West, at a macro level, both Ki Residences and Clavon would benefit from the Jurong Lake District, Jurong Innovation District and Tuas Mega Port.

Collectively known as ‘The West Side Story’, It’s featured at pretty much all the sales launches for west side projects.

While there are other transformations in the region as well – like the Beauty World rejuvenation or the Dover Knowledge District, the main focus has always been on the 3 big ones.

Sheer size takes it all.

370k jobs.

Putting it in perspective, even if only 50% were to be fulfilled i.e. 185k jobs…

Of which 25% choose to stay in private housing, equating to 46,250.

Plus a futher assumption of at least 2 pax in the same household, rounding down, I would arrive at 20,000 units. 

Yet, if you add up all the present and upcoming launches in the western districts of 21, 22, 23 and 5, including mega projects Parc Clematis and Normaton Park, you barely pass 10,000 units!

It’s no wonder many west side projects have done well.

The Clement Canopy, located right beside Clavon for example, sold out in 11 months!

And many other existing launches also have healthy take up rates.

Whistler Grand – 630/716 SOLD (88%)

Parc Clematis – 990/1468 SOLD (67%)

Daintree Residences – 299/327 SOLD (91%)

Kent Ridge Hill Residences – 398/548 SOLD (73%)

But the same cannot be said of all projects.

Dairy Farm Residences – 40/460 SOLD (<10%)

Verdale – 50/258 SOLD (19%)

Source: URA Oct 2020

It is clear that the West Side Story has not convinced buyers to snap up every project in the west in equal measure.

How about Ki Residences and Clavon then?

Will it be a case of red hot or cold turkey?

We need to drill down to the micro level as although they both lie near to the same arterial road (Clementi Road), the immediate locale of both these projects are very different.

First, Ki Residences.

Supply: Needless to say, being 999-year leasehold is one of the key selling points of the project.

In addition, it has a large land size for full facility luxurious living, something even rarer for land of such tenure.

The only other comparable recent launch was Forett @ Bukit Timah, which has achieved a very respectable 45% of sales in less than 3 months, at an average price of 19xx psf.

In the vicinity, Ki Residences is only 1 of just 3 condos.

And also the first new launch in about 20 years.

No doubt, from a supply perspective, it’s a resounding LOW.

However, demand is a question mark as in terms of accessiblity, Ki Residences isn’t the greatest.

Being undistrubed for the most part of 20 years till the Brookvale Park enbloc in early 2018, there has not been a test of demand for new properties.

One option is to use rental demand as a proxy.

From the data, it seems like as a % of total units available, the number of rentals is the same between the areas of Ki Residences (Sunset Way), and Clavon (Clementi).

Overall volume is however higher at Clementi, not withstanding the competition from HDBs at Clementi, whereas for Sunset Way it is mostly a private estate.

I personally feel that Clementi Park as a project itself is unique enough to appeal to tenants whereas Ki Residences may struggle to differentiate itself from other projects in Clementi.

And we still have the mega project Parc Clematis which will definitely draw plenty of demand in the region.

Ki Residences and Sunset Way will likely be a niche option for buyers and tenants who enjoy the exclusivity of the area.

Demand & Supply Score for Ki Residences: 2/5

For Clavon, buyers have the benefit of comparing to the performance of its neighbour, The Clement Canopy.

Much akin to Penrose’s comparison to Sims Urban Oasis.

Except, the numbers look even better at The Clement Canopy with 5/5 profitable transactions with average profits higher than Sims Urban, and no unprofitable transactions.

Historically, homes in Clementi have been in demand.

A major reason for that are Schools. (circled in red)

From Primary Schools all the way to University and even International Schools, the Clementi area caters to all the education needs of a child’s growth to adulthood.

The large community of public housing in Clementi also contributes to upgrader demand.

HDB prices there are no slouch either, with 4-room and 5-room resale prices being some of the highest in the island.

Clementi is after all a very mature town.

As a buyer looking to stay in private property in the West, Clementi is an area which many would naturally consider.

It has the convenience, schools and amenities of being in the heartlands while not being too far away from the city.

Demand & Supply Score for Clavon: 4/5

2. Hype

It’s hard to accurately measure hype without a market survey or poll.

What we can look at as indication though, is agent participation.

It takes effort to work a project launch and if it’s a project which wouldn’t sell, it wouldn’t motivate agents to participate either.

I shan’t be too specific here, but according to data from one of the marketing agencies:

Clavon has 640 units total, with qualified presenters numbering just below 30%.

While Ki Residences has 660 units, with qualified presenters numbering just over 10%. 

That same agency had more than 30% coverage for Penrose.

Data of confirmed appointment bookings have also shown Clavon to be the more popular option.

If Penrose was 5/5

I’d give Hype scores of 4/5 for Clavon

And 2/5 for Ki Residences.

3. Uniqueness

The Linq’s results is testament to how a unique value proposition can attract buyers.

It is in this aspect also where in my view, Ki Residences shines.

In addition to it’s 999-year tenure and large land size, Ki Residences can also be considered the first mover into a vicinity of large untapped residential land still subject to detailed planning.

It is almost a certainty that these land plots when released in future would be 99-year leasehold land.

Of the other 2 existing projects…

I do not expect Clementi Park to en bloc anytime soon due to high acquistion cost for developers of the large land plot.

And Freesia Woods is still relatively new, sitting on a small land plot.

Structures and modern facilities will age, and technogies will face obsolescence…

But Ki Residences would be the standout project in the Sunset Way vicinity for a long long time.

Uniqueness for Ki Residences: 5/5.

Clavon on the other hand, is by UOL, the same developer for The Clement Canopy.

Looking at the architectural drawings and designs, I am sure that Clavon will be as beautiful or if not more so than The Clement Canopy.

And it some ways also quite similar.

With that infinity pool, lounge chairs and the cabanas behind…

Can you tell which is which?

What about the similar sized plot of land between both projects?

With very similar attributes, it could very likely be another beautiful, yet similar project.

Guess it’s really up to the developer/architect then!

At the moment though, Uniqueness for Clavon: 2/5.

4. Future Potential

For both Ki Residences and Clavon, major transformations already announced will not be happening in the near vicinity.

Looking further out, a bright spot for both projects would be the Cross Island Line.

This major transformation to be completed by 2030 would improve connectivity from Jurong through Clementi, Bukit Timah, Ang Mo Kio, Hougang, Pasir Ris, all the way to Changi.

A potential stop at Sunset Way would be game changing for the connectivity of Ki Residences.

While for Clavon, Clementi MRT would become a interchange station.

I’d say Ki Residences has the slight edge at 4/5, due to the larger potential impact.

Lost a point because location is yet to be known.

Clavon – 3/5.

5. Price

Finally.

Everything else can be right, but if price isn’t, it pretty much goes into the drain.

Indicative prices for both Ki Residences and Clavon are out, so we’re able to do some analysis.

Personally, they looked about right.

Which developer would dare to price themselves out of today’s market? Haha.

Let’s start with Clavon.

For Clementi area I don’t think we can expect 13xx psf anymore, given that the land was purchased by UOL at $788 psf per plot ratio (ppr).

Minimally Clavon would start from 14xx psf.

Based on the breakeven psf calculated by Edgeprop, developer is pricing the units at a 10-30% profit margin.

Especially because Clavon is a high rise project, the higher floors will surely go up to 17xx psf, or possibly even till 18xx psf.

Here’s a visual comparison of Clavon against the average transacted pricings of other fringe projects around Singapore.

I think it is fair to say that Clavon is priced reasonably among new launches.

Another necessary comparison that can be made is with neighbouring The Clement Canopy.

Lest we forget, The Clement Canopy was one of the first (and fastest) project to be completed using the PPVC method of construction.

Therefore the lease start dates between Clavon and The Clement Canopy is only about a mere 3.5 years.

We certainly can’t go back to the past pricings, and the market has moved upwards during this time.

In fact, the Clavon land was sold at 28% higher than The Clement Canopy plot ($615 psf ppr).

However, judging from indicative prices, the full premium isn’t priced in, with developer only selling at about 10-20% higher from The Clement Canopy’s launch pricing.

There probably would still be some difference from The Clement Canopy’s resale pricing today…

But Clavon is the better location with a side gate leading directly out to Clementi Ave 2, for a <700m walk to Clementi MRT Station.

I’d give Clavon a 4/5 on price.

Lost 1 point for being a good percentage higher than The Clement Canopy’s launch not too many years ago.

But heck, we can’t turn back time.

Just goes to show the importance of have first mover’s advantage in an area!

Which… leads me to Ki Residences, the first mover in its vicinity.

A mid rise project with 10 blocks of 12 storeys each, price range wouldn’t vary too greatly, so let’s estimate an average of $1,750 psf for purposes of this analysis.

Let’s look at how the comparable map pans out.

I found that given the tenure, pricing is really attractive.

There aren’t many other available FH/999y new projects for sale that has a lower psf.

Of the ones that do, they don’t have the luxury of space like Ki Residences.

Parc Komo, as indicated above, comes the closest, being a mixed project with decent facilities.

Other cheaper ones are NoMa/Casa Al Mare, boutique developments.

Lattice One, located along Upper Thomson Road is a standout.

Makes Ki Residences a steal to be priced similarly.

Despite the attractiveness of freehold/999-year tenures, you may be surprised to know that such projects don’t usually sell very fast.

In fact, the 99-year projects are typically the better sellers.

 

The reason?

Developers usually build-in a price premium for the tenure.

Especially for Ki Residences which has slightly larger unit sizes, price quantums are high.

Contrast the cheapest unit at Ki Residences to be from $1.238m vs < $900k for Clavon and the affordability becomes clear.

Overall promising psf, but in my view the slow moving trend is set to continue.

Pricing: 2.5/5 for Ki Residences.

verdict

Clavon – Total Score: 17/25

For buyers looking to enter Clementi for years and perhaps previously felt that The Clement Canopy or Whistler Grand was too far from the MRT.

Or that Parc Clematis simply seems too crowded with almost 1500 units.

Clavon presents that balance of exclusivity and convenience with only 640 units, amenities at your door step, and being within 700m of Clementi MRT station.

Pricing is fair given the current market…

There is plenty of hype for the project, and I expect strong response for the launch.

Still, being a high rise development, the price increases from lower floors to high may restrain some buyers.

If you want a value price, get in early for your chance at the ballot.

Ki Residences – Total Score: 15.5/25

For buyers in for the long haul and don’t want to pay the premium for Beauty World, Ki Residences is a good fit.

It’s not the most well known area so if you’re unfamiliar, take this chance to walk around the Sunset Way estate and you may find interest in it.

While not the most accessible, a new road extension would put it within 800m walk to Clementi Road.

Plus, 2-year free shuttle bus services to the MRT station provided.

At the support level pricing for Freehold/999-year projects in Singapore, there is little risk in buying Ki Residences.

A unit type to watch is the 3-br layout starting from $1,428,000.

Efficiently designed with a even an added storeroom, it could be the best seller for Ki Residences.

Get in early if you have strong preferences on unit selection.

Overall, Clavon takes it by 1.5 points over Ki Residences!

However, they’re 2 very different products suiting buyers with contrasting preferences.

If you know you want to get something but still unsure, I can help you with a holistic comparison of all available projects in the market.

It’s not possible to cover every angle in an article and I’ve tried my best to be as objective as possible.

For a more personal consultation catered to your unique needs and preferences, please speak with me directly 🙂

I’ve worked with multiple groups of buyers for successful purchases.

I hope you’ve found value in this article!

Learn more about me, and get in touch 😊

Feel free to also leave a reply below if you have any thoughts about these projects to add, or questions to ask.

Thanks!!

Other suggested readings:

Forett at Bukit Timah: What You Need To Know

Kent Ridge Hill Residences: Review & SWOT Analysis

Whistler Grand Review (Showflat + Analysis)

10 Singapore Transformations to look out for in the next Decade

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