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Tampines, your pot of gold!

Tampines, your pot of gold!.

In the last article, it seems that Tampines was a unpolished diamond so far. No one knows why the first mover advantage was undermined to such a extent. Of course , that is where the jobs of analyst comes about. To find the arbitrage opportunity in every market.

As shown in the above pic, in the vicinity of Tampines Central, it is all surrounding by hdbs. Only with the exception of 3 executive condo called The Tampines Trillant , Citylife @ Tampines and Pinevale. Their respective traded psf recently are Tampines Trilliant ($819psf ,1001sqft , June 2015), Citylife @ Tampines ($844psf, 1378sqft, June 2015) and Pinevale ($711psf, 1561sqft, Sep 2016).
All seems logical at this moment. Psf looks reasonably for an EC. EC land was given to developers for the sandwiched class that is not able to afford a condo.
The only condos around Tampines which is near the MRT is at Tampines West DT line depicted below. (Note: there is no private condo or EC around Tampines East DT).

Seems all the activity is all around Tampines west downline vicinity with all the projects along Tampines Avenue 10. With the 1st project launched being Tropica . Do note that only Arc at Tampines is EC with the rest being private condo. Lets take the first project launched as the benchmark is this is always the cheapest for 2 reasons. First mover advantage usually bid land cheaper and lease start earlier also make recent transaction cheaper. One unit was transacted at Tropica at $810psf, 1195sqft in Oct this year.  Compared to the hottest project in Alps where 43% was sold on launch day. A 1066sqft unit was just transacted at $1053psf. All seems logical till now as the land plot of Tropica is old that start in 1996 vs the recent Alps. As this is about 20 years difference , hence for a 99 years lease it is ok to depreciate 20% (1000psf vs 800psf) as compared to a newer plot of land. Also comparing to the ECs near tampines central there is also a 20% difference given different title deed status (1000psf vs 800psf).

We forgotten one major thing we are comparing only in Tampines ! In the last point Jurong was $1300psf. Tampines private is only 1000psf and $800psf for ECs ! Wow, now it seems Tampines is super cheap priced 30% below Jurong even though it has the same regional centre plan like Jurong!
I wont go into details why there is such a difference but I only can depict a simple analysis. Jurong projects was launched higher hence pushing up prices. (Lake grande 947sqft at $1274psf July 2016).
We need not go into why Jurong is more pricey and the reasons behind it. All we know that Tampines is undervalued and we are looking at a pot of gold in this area!