Analysis of a 3 bedroom unit in Interlace and Skyline Residences

Would you buy a 3 bedroom unit next to the MRT with a sea view or one that is not so near the MRT and does not have sea view?

Most people would go for the one beside the MRT with a sea view. 

But is that the wisest decision? 

In this post, we compare the performance of two 3 bedroom units, one at the Interlace and the other at Skyline Residences beside Telok Blangah MRT.

Location of Interlace and Skyline Residences

Interlace and Skyline Residences comparison

 

Details of Interlace and Skyline Residences

Interlace

  • Developer: CapitaLand
  • TOP: 2013
  • 1040 units
  • 99 year leasehold

Skyline Residences

  • Developer: Bukit Sembawang
  • TOP: 2015
  • 283 units
  • Freheold

 

The Interlace had units that hit S$854,700 in profit. All profits averaged approximately S$300,000. Over the life of the project, 344 units were for a profit while only 22 were unprofitable.

In Interlace, 95% of resale transactions were profitable (344 sold at a profit out of total 363 sold).

Profitable transactions at the Interlace

Interlace profits

 

While Skyline Residences, which is freehold and next to MRT, had a maximum profit of S$423,000. All profits averaged approximately S$100,000.

Over the life of the project, 20 units were sold for a profit while 20 were sold for a loss.

In Skyline Residences, 50% of resale transactions were profitable (20 sold at a profit out of total 40 sold).

Profitable transactions at Skyline Residences

Skyline residences profit

In summary, owners of units at Interlace had larger profits than at Skyline Residences.

The next logical question is why there is such a huge difference in performance for 2 projects in the same district (D4).

This analysis will compare the projects through 3 lenses

  1. Entry pricing
  2. Layout of a 3 bedroom units
  3. Rental attractiveness

Factor 1: Entry Pricing

The first reason we will examine is the entry pricing of buyers into these 2 projects.

At launch, the developer was selling Interlace units at between S$1000 to S$1250 psf. This is much lower than Skyline Residence's developer selling price of between S$1800 to S$2000 psf.

Interlace selling price psf

Interlace historical prices

 

Skyline Residences was selling at a price of between S$1800 to S$2000 psf. 

The reason for a higher selling price was its location beside Telok Blangah MRT and most units being constructed with a sea view. This resulted in premium pricing cahrged by the developer.

Skyline Residence selling price psf

Skyline residences average historical price

 

Zooming into a 3 bedroom sold at the Interlace, this one was sold for S$2.67m.

Notice the very functional floor plan, large bedroom and living area sizes.

The master bedroom can fit a king size bed and a study table. The bedrooms can fit a queen size bed and a small study table. This is in contrast to Skyline Residence's 3 bedroom floor plan.

Interlace 3 bedroom floor plan

Interlace 3 bedroom floor plan

This particular unit at the Interlace made a profit of S$500,000. It was bought on 29 Aug 2016 for S$2.17m and sold on 7 Jun 2021 for S$2.67m.

Interlace 3 bedroom transaction

 

This 3 bedroom unit at Skyline Residence sold for S$2.63m

Notice how small the bedrooms are. They can only fit a single bed!

Skyline Residences 3 bedroom floor plan

Skyline residences 3 bedroom floor plan

 

This particular 3 bedroom unit at Skyline Residence made a loss of S$133,000.

It was bought on 2 Sept 2011 for S$2.76m and sold on 10 Mar 2021 for S$2.63m

Skyline Residences transaction

Skyline residence 3 bedroom unit loss of 133k

 

Factor 2: Layout

For the same price of about S$2.6m, the Interlace's 3 bedroom unit provides a much larger living space of 2,056 sqft.

The master bedroom is 22.7 sqm, while the other 2 common bedrooms are 11.9 and 15.2 sqm respectively. A queen size bed and study table can be comfortably fit into the rooms. The rooms are almost 1.5 to 2x larger than Skyline Residence's bedroom sizes. 

Interlace with a larger internal living space provides a much more comfortable living environment in the unit than Skyline Residence.

Interlace 3 bedroom master and common bedrooms

Interlace 3 bedroom master and common bedrooms

Interlace's bedroom units can fit 2 queen size beds

Interlace 3 bedroom unit can fit 2 queen size beds

Skyline Residences 3 bedroom unit layout is inferior to Interlace's.

The master bedroom is 13 sqm while the common rooms are 7 sqm each.

It is not possible to fit a queen size bed into the rooms, much less an extra study desk.

There is also wasted space at the balcony of 11.2 sqm and planter area of 9sqm.

Skyline Residences small master and common bedrooms

Skyline residences 3 bedroom master and common room

Skyline Residences wasted balcony and planter space

Skyline residences balcony and planter wasted space

 

 Rental attractiveness

Renters favour Interlace and are willing to pay more for their 2 and 3 bedroom units than Skyline Residence, even though Interlace is further from the MRT station.

  • Interlace 2 bedroom: 3300 to 4400 per month
  • Interlace 3 bedroom: 5100 to 6800 per month
  • Skyline Residences 2 bedroom: 3600 per month
  • Skyline Residences 3 bedroom: 5300 to 5400 per month

This speaks to the attractiveness of Interlace compared to Skyline Residences for renters.

 

What can we learn from the analysis and what should potential buyers do?

  1. High profits are not guaranteed from freehold projects.
  2. Future buyers of a resale unit generally look for liveability and space, if they are buying for their own stay. With an equal budget, future buyers may choose a 99 year leasehold project that is further away from the train station if it offers a superior living experience and more space.
  3. Properties beside MRT stations may not necessarily command a higher rental than one that is further away. Renters look for other qualities such as large land spaces, facilities and a spacious internal living area. Both Interlace and Skyline Residences are located close to the city, and tenants have many options from Grab, GoJek and Comfort Delgro taxis to travel around.
  4. Working from home is becoming the norm since COVID-19, and buyers now look for comfort in their internal living area.
  5. Instead of focusing solely on proximity to MRT stations and freehold projects, focus on the liveability and layout of the unit
  6. Skyline Residences' are owners of a freehold unit, why did they not hold on to their unit but rather choose to sell at a loss? This suggests that the other weak points trumped the freehold quality of the project, resulting in an overall less attractive project compared to Interlace.

 

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