Singapore, 26 Aug 2016 –
Not for long. The location’s fundamentals point to Good Upside Potential.
Since as early as 1991, the idea was mooted to decentralize economic activity from the Central Business District (CBD) to other parts of the island. Thus, the regional centres were born. Tampines was the first to be built, with its development starting in 1992. More than 20 years later, Tampines is now the most established of all the regional centres.
Following Tampines’ success, the government followed up with plans to transform Jurong and Woodlands in 2008 and 2014 respectively. Recently, in Budget 2016, Finance Minister Heng Swee Keat announced the building of the Jurong Innovation District, the “industrial park of the future”.
These comprehensive plans have led to home values spiking in the West and North. The median price of private condominium projects in Jurong hit $1,354 per square foot this quarter. Over in the North, new homes in Woodlands and Yishun achieved median prices of $1,080 and $1,052 per square foot respectively.
In comparison, the median price in Tampines hovered around $961 per square foot, even lower than Yishun’s, despite its regional centre status. Amidst all the hype and buzz surrounding Jurong and Woodlands, it appears that Tampines has been forgotten.
However, that is not the case. Tampines is actually a great town to live in and well sought after by buyers. Around 5000 applicants were vying for a unit in the Housing and Development Board (HDB) August Built To Order (BTO) sales launch.
As further proof of its popularity, flat prices in Tampines have outperformed neighbouring towns Bedok and Pasir Ris. Taking 4 Room HDB resale flats as an example, the median selling price in Q2 2016 was $423,400 while those in Bedok and Pasir Ris were $399,000 and $405,000 respectively.
HDB flats are not the only properties favoured by buyers, private condominiums are popular as well.
Tampines was the 13th most active area in terms of transactions, out of a total of 36 areas. Activity in Tampines was higher than areas such as Queenstown and Clementi. Despite significant interest in Tampines, there has yet to be a corresponding increase in prices. Latest statistics point to Tampines’ median prices being at a 37 per cent discount to the whole island’s. Furthermore, compared to Jurong, an upcoming regional centre, prices are 29 per cent lower. As such, from an investment viewpoint, private properties in Tampines may enjoy more headroom for future capital appreciation.
Figure 2 Median price of private residential property
Source: Urban Redevelopment Authority (URA) REALIS, ERA Research
Amenities for everyone
Tampines is home to almost 80,000 households, out of which more than 37,000 are families with three or four members. Only Jurong West and Bedok have a higher number of resident households. There are several reasons why Tampines is one of the most popular areas which families choose to reside in.
There are various amenities which provide convenience to residents. Tampines is home to three shopping malls, Tampines Mall, Tampines 1 and Century Square. Major tenants of these malls include Isetan, BHG, H&M, Muji, Topman and Uniqlo. Once found only in major malls in town areas, these fashion brands and department stores have branched out into the heartlands. Families no longer need to travel all the way to town to for a weekend shopping trip.
For every day grocery shopping, Fairprice, Fairprice Finest and Cold Storage are located in the three malls. In addition, Tampines is also home to a Giant hypermart which is open till 2am on Saturdays and 12am on other days.
Swedish furniture retailer IKEA and consumer electronics retailer Courts have also set up megastores in Tampines, providing residents with a one-stop solution for their household needs. In particular, the Courts megastore is one of Asia’s largest, with 136,000 square feet of retail space.
To further spruce up the town, plans are in place for the construction of Tampines Town Hub. The first of its kind one stop hub is situated at Tampines Town Centre and will concentrate sports, retail and community related activities into one location.
Tampines also offers reprieve from the hustle and bustle of city living. Families can take walks in the various neighbourhood parks in Tampines. Plans are also in place to ensure that most homes will be within 400 metres of a park or park connector. More green spaces have also been planned. Tampines North Quarry Park and Boulevard Park will be completed in the near future, to ensure that parks and water bodies remain within easy reach of residents.
For families with young ones, fret not, as Tampines is also home to many educational institutions and child care centres. A quick search on Street Directory reveals as many as 74 child care centres in Tampines. Various schools are also located in Tampines, from primary all the way to tertiary. Singapore’s fourth autonomous university, Singapore University of Technology and Design, has also recently moved to its campus at Simei. This means that students can literally start and end their education life all without leaving the East.
Of course, even though Tampines is pretty much a self sustaining town, residents will need to travel to other parts of Singapore as well. Currently, Tampines is served by the East West Mass Rapid Transit (MRT) Line and an extensive bus network. However, things are about to get much better with the completion of Phase 3 of the Downtown Line in 2017. Tampines MRT station will become an interchange between the East West Line and Downtown Line. Tampines town will also gain two more MRT stations at Tampines East and Tampines West. The new MRT line is expected to alleviate congestion on the East West Line and provide a strategic transport link for residents and commuters living in Tampines to the Marina Bay area and the rest of the island.
The commercial centre of the East
While Tampines has shown itself to be a desirable town to live in, an important consideration of residents naturally relates to their commute to work. According to the Singapore Department of Statistics, Tampines has the 152,400 resident working persons, the 2nd highest in Singapore. Evidently, Tampines is a top pick among working persons. Why is this so?
The East Region is a major employment hub outside of the CBD, with more than 1 million square metres of existing commercial space. Main employment clusters include Tampines Regional Centre, Changi Airport and Changi Business Park.
Tampines Regional Centre is where several banks such as OCBC and UOB have located ther back end operations. Household names such as Singapore Airlines and Hitachi also have their offices there. Changi Airport is home to some 77,000 jobs and accounts for 3 per cent of Singapore’s Gross Domestic Product (GDP). Changi Business Park is a 71,000 square metre project which houses reputable tenants such as DBS, Citibank, IBM and Standard Chartered. It is also Singapore’s largest integrated business park development.
According to the 2015 General Household Survey by the Singapore Department of Statistics, 67 per cent of resident working persons commute to work via some form of public transport or walk to work. Consequently, commuting time becomes an important factor when buying a house. Few people who work in Changi Airport would choose to stay in Jurong as the commuting time to and fro daily is a strong deterrent to many.
Hence, Tampines is a popular housing estate as it strikes a balance between being affordable and convenient. Those working at Tampines Regional Centre can simply walk to their work place or take a short bus ride. Changi Business Park and Changi Airport are one and four MRT stations away respectively.
In addition, business travellers who need to travel frequently may find Tampines an attractive location due to its proximity to Changi Airport. Going by MRT will take about 15 minutes and driving or taking a taxi will result in an even shorter travelling time of about 10 minutes.
Further demand for housing in Tampines may be fuelled as a result of the government’s plans to add more commercial space in the East. According to URA estimates, another 504,000 square metres of commercial space will be added to the East, almost 40 per cent of current stock.
Part of this will be from expansion plans at Changi Airport and Changi Business Park. Already, Terminal 4 of Changi Airport is due for completion in 2017 and Terminal 5 and Jewel are in the works. These new projects are expected to create thousands of additional jobs as the combined size of Terminals 4 and 5 alone is three quarters of the total current facilities.
Changi Business Park will be further built up, to consolidate its status as an employment hub and a vibrant business park. In addition, to capitalise on its proximity to the Singapore University of Technology and Design, potential tie ups and collaborations are in the works with students from the university.
All in all, Tampines has shown itself to be an ideal live-work-play destination. Since its development in 1992, Tampines has grown in both size and scale. Moving forth, the East is set to become a hub of opportunities and being strategically located, Tampines is well-poised to take advantage of any future growth.
Will it still remain forgotten for long? We do not think so. Sooner or later, the market’s attention will swing back to the East.
This article was contributed by Eugene Lim and Seah Yao Hui. Eugene Lim is the key executive officer and Seah Yao Hui is a research analyst at ERA Realty Network.
