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A Property Wealth Perspective of Sceneca Residence

Updated: Dec 7, 2022

When it comes to property wealth progression, one of the first things I tell clients is to look at the number of potential alternatives. A property can be of high quality and in a strong location – but if there are multiple alternatives nearby, that means possible competition when it comes to resale, and definite competition when it comes to rental.

I will look at Sceneca Residence with this as the key issue. As I’ll explain below, the location and features of the project all look to be top grade; but there are several condos near the Tanah Merah MRT station. So our main question here is, does Sceneca Residence hold a strong, discernible edge over them?

Also, what sort of price movements can we expect from the area, based on what these other condos have already shown?

A summary of Sceneca Residence

Address: 28 Tanah Merah Kechil Link, 468458

Developer: MCC Land (Singapore) Pte. Ltd.

Lease: 99-years leasehold

Site area: 94,722 sq. ft.

Number of units: 268

Expected TOP: 2026

On the developer:

MCC Land’s recent developments include The Landmark and One Bernham (you can see some more details here). These will give you some sense of the developer’s overall style and feel. Some other memorable ones in the past are The Poiz (which also brought some much-needed retail into the Potong Pasir area), The Santorini, and The Alps.

Now MCC Land did see some issues regarding The Alps in 2020; this involved the speed of defect rectifications. But I think to be fair, we should acknowledge The Alps had its TOP when the Covid-19 pandemic was raging. It would have been difficult to get workers at the time, and MCC Land did press on when lesser developers may have given up; so credit to them for that.

I also feel it makes them eager to impress this next round, with Sceneca Residence. Overall, MCC Land is a reasonably well established and reputable developer.

Main observations:

Sceneca Residence is a mixed-use development, with a ground floor commercial segment spanning 21,528 sq. ft. The residential component can be considered small and on the exclusive side, with just 268 units. These range from one to four bedrooms.

From an investor or owner-investor’s perspective, I would focus on the following points:

  • May be one of the most affordable new launch condos this year

  • Connected to Tanah Merah MRT station

  • Viable accommodation for Changi Airport or Changi Business Park workers

  • Small unit count

  • Multiple schools within the HSD

  • Somewhat limited retail and F&B (for which this project is the fix)

1. May be one of the most affordable new launch condos this year

MCC Land secured the land plot for Sceneca Residence at $248.9 million, back in October 2020. This comes to about $930 psf, at a time when land prices hadn’t gone as crazy as 2021/22.

If we add typical construction costs of $350 psf, and add on a 30 per cent margin and other costs, this is around $1,664 psf. If we add a premium for being an integrated development (integrated projects are usually priced higher for the increased convenience), we might expect prices of around $1,800 psf.

This is quite competitive, in a time when even non-central condos like AMO Residence have seen prices reach $2,300 psf.

In addition, if you see the chart on the upcoming launches, It's actually the nearest to the MRT comparing to the rest. So technically, most affordable plus nearest to MRT. That brings me to my next point.

2. Connected to Tanah Merah MRT station

Sceneca Residence is connected to the Tanah Merah MRT station. I should stress this is more significant than just having “any” MRT station nearby.

Tanah Merah is important because it’s the interchange where the train line connects to the Singapore Expo, and eventually to Changi Airport. This significantly improves rentability (see point 2 below).

For those who intend to hold on to this property for the long term (e.g., 15+ years) the Land Transport Master Plan 2040 is of interest here. The plan involves converting the Changi Airport Branch line to part of the Thomson-East Coast Line (TEL). This connects Tanah Merah to both important train lines, and it will in fact become the last stop on the TEL.

While more and more condos have access to an MRT station these days, condos with access to multiple train lines will stand out better.

Shorter term investors, however, are probably less concerned about this far future development.

3. Viable accommodation for Changi Airport or Changi Business Park workers

For those who work in Changi Airport, or Changi Business Park, Sceneca Residence will be the most practically located new launch this year. Tanah Merah station is just two train stops away from Changi Airport, with provides easy access to the retail outlets and eateries clustered there.

For tenants, I am sure that having the Changi Jewel two stops away will be a strong draw; and pilots, CAAS staff, etc., will appreciate being the short train ride.

For those who work at Changi Business Park, Sceneca Residence is only about a five-minute drive to Changi City Point.

Being the newest launch in the area, Sceneca Residence will be priced higher than surrounding resale units; so that may translate to a lower gross rental yield, compared to its older neighbours.

However, Sceneca Residence can see higher rentability, thanks to its newer facilities, and immediate access to the train station and its own commercial segment.

4. Small unit count

A small unit count has its pros and cons for investors. My initial worry was regarding the maintenance fee: smaller condos generally mean higher fees, as there are fewer households to share the cost. This is part of the price that buyers face, in return for greater privacy.

However, maintenance fees have turned out to be quite reasonable: single bedders have fees ranging from $293 to $313 per month, while three-bedders are about $356 per month (up to $436 per month for the bigger Grande and Premium units). This is comparable to most condos today.

The other concern is the transaction volume in the long run. Small unit counts can lead to low transaction volume, which introduce some price volatility. But with 268 units, Sceneca Residence is not as extreme as boutique units with 40 or 50 units; so this is not as much of an issue.

Overall, I’d call this a win as Sceneca Residence has the exclusivity of a smaller project, while retaining reasonable maintenance costs.

5. Multiple schools within the HSD

There are multiple schools within the Home School Distance (HSD), which I include as some investors consider it an upside.

The following are within the one-kilometre HSD:

  • Bedok View Secondary (470 metres, around nine-minutes’ walk)

  • Anglican High (520 metres, around nine-minutes’ walk)

  • Bedok South Secondary (600 metres)

  • St. Anthony’s Canossian Primary (900 metres)

If you believe that simply having multiple schools nearby will help with resale, this might appeal to you. But if you don’t feel this is relevant to tenants or future buyers, you might discount this as a plus.

6. Somewhat limited retail and F&B (for which this project is the fix)

I would normally be put off by at the lack of retail and F&B nearby, even with Changi Airport two stops away. I will discount this issue for Seneca Residence however, since Sceneca Residence itself the fix for this issue.

The developer has mentioned that Sceneca Residence will have a supermarket in the commercial mix: 1,000 sqm. will be dedicated to the supermarket, and another 1,000 sqm. is for other retail and F&B.

Thanks to the commercial segment, this condo will be a boon to some of its older neighbours, by providing eateries / shops in proximity. I would expect Sceneca’s commercial floor to quickly become a hub of this immediate area, with residents are just an elevator ride away.

Besides upcoming Sceneca Residence itself, the closest places are Bedok Shopping Complex and another condo, East Village (this condo has commercial space that includes a supermarket). These are not particularly large malls, but can cover most basic needs. These places are a long-ish but manageable 10-minute walk, from Seneca.

Nearby alternatives to Sceneca Residence:

There are five projects that are relatively close (within one kilometre) to Seneca Residence. These are:

  • Urban Vista

  • Optima @ Tanah Merah

  • Grandeur Park Residences

(All data courtesy of Square Foot Research)

1. Urban Vista

Urban Vista averages $1,450 psf, and has seen 30 profitable transactions with 76 unprofitable transactions, making for lacklustre performance*.

Despite its proximity to Sceneca Residence, Urban Vista doesn’t make for an apples-to-apples comparison. Most of Urban Vista’s units are quite compact, with many ranging between 441 sq. ft., to 549 sq. ft.

Having so many small units is not ideal for the resale market. Many condo buyers today are HDB upgraders, moving into private properties from their flats. These buyers are family units, and they can’t fit into one-bedders. As such, the pool of prospective buyers is quite limited.

Sceneca Residence tends toward larger units – most are three-bedders ranging from 904 sq. ft. to 1,055 sq. ft. Only 60 of the 268 units in Seneca Residence are one or two-bedders, which makes for stronger resale prospects.

Also, at 582 units, Urban Vista will also feel much less private than Sceneca Residence’s low 268-unit count.

*This is partly due to timing and policy tweaks. Urban Vista would have seen sales start sometime in 2013. But shortly after, cooling measures were introduced, and the government put in place loan curbs such as the Total Debt Servicing Ratio (TDSR). The new measures would unfortunately have driven prices down for the 2013 buyers.

2. Optima @ Tanah Merah

Optima @ Tanah Merah averages out at $1,356 psf. This is a 99-year leasehold condo dating back to 2012.

Optima used to have a reputation for being noisy, and some might worry the same will happen to Seneca Residence. I think it’s fair to point out this was due to upgrading works to Tanah Merah MRT station, sometime around 2016. This has since been completed, so the noise issue is no longer what it used to be.

Optima is already heading into its second decade, so Sceneca Residence will have a notable age advantage; and its the combination of having stores right downstairs, plus newer facilities, will weigh heavily against Optima’s lower resale prices.

Another factor with Optima is the use of bay windows – these are large protruding ledges from the windows, which take up square footage. This design is now unpopular with many buyers, as it’s considered to take up living space with little benefit.

Sceneca Residence also uses a dumbbell layout, which minimises wasted space such as long corridors – this wasn’t as common in the previous decade, and is more efficient than some of the older floor plan styles in Optima.

That said, one area where Optima can match Sceneca is with its lower unit count (298 units). This makes it feel just as private and exclusive.

3. Grandeur Park Residences

Grandeur Park Residences is a 99-year leasehold condo, completed in 2020. This would be the next newest condo near Tanah Merah MRT station, compared to Sceneca Residence; so it’s probably the most viable alternative. Prices here currently average $1,654 psf.

The key distinguishing feature will be the unit count. Grandeur Park is much larger than Sceneca Residence, or even the other two condos on this list – at 720 units, there isn’t the same sense of exclusivity. It also sites on a commensurately larger land plot: 24,394 sqm., compared to Sceneca’s 8,880 sqm. Buyers who believe in larger projects – such as if you feel they’re more spaced out – might prefer Grandeur Park despite the higher unit count.

The other difference is, of course, that you’re a bit more of a walk to the Tanah Merah MRT, compared to Sceneca Residence that’s practically on top of it (but to some buyers, a seven-minute walk is negligible).

Those who want more privacy, and who want to be just an elevator ride from the supermarket and amenities, will still prefer Sceneca Residence. But those who are on a tighter budget, or who need an already completed property, can give Grandeur Park a look – you’re at least in walking distance of Sceneca Residence and its commercial component, even if you can’t live there directly.

As a general conclusion, I would say the integrated component of Sceneca Residence is sufficient to differentiate it from other Tanah Merah condos; and while it may be priced higher than existing oldies (new launches are always priced above resale counterparts, by the way), this is still one of the most affordable new launches of the year.

For any home buyers in the hectic 2022 market, Sceneca Residence is at least worth a serious look. For further questions or a more direct consultation, reach out to me and I can advise you based on your individual needs.

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