Singapore's premium retirement village by daniel hung

Real Estate Advisory

Singaporeâ&#x20AC;&#x2122;s First Premium Retirement Village RE3103 Real Estate Development

Real Estate Advisory Urban Development Division: Hung Ping Yi Lim Shao Qian Lester S Deepa Muhammad Danial Arun Hani Amalia Binte Adnan Yuta Nasu Huang Jingyin

A0174758M A0140762L A0141789R A0140593H A0142842J A0175657N A0175547U

RE3103 Real Estate Development

Executive Summary In Singapore, the expected population of seniors aged 65 years old and above is to hit 900,000 by the year 2030, with the current population passing the halfway mark. It is thus paramount to understand the growing needs for the aged and to meet the expectations so as to allow our senior citizens to age with grace with a high quality of life. Problem Analysis Efficient and affordable aged-care models and solutions are crucial when facing an ageing population with growing needs. It is important to keep up to date with the health care assistance and living options needed for the aged population, especially with the longer life expectancy rates. Whilst retirement villages are a popular concept and vastly common in the western world, the concept has not taken off in the Singaporean market despite several attempts at setting up such retirement villages. The Singapore National Co-operatives Federation and NTUC Income has proposed such a concept back in 1995 and 1998, but plans did not take off due to lukewarm responses from the target groups. A slightly more successful development was attempted in 2012, as in the case of The Hillford. However, the development was taken by people of a younger demographic. Thus, we seek to ensure that our proposal will satisfy the diverse needs of owners, while at the same time, be a meaningful and sustainable project for Singaporeans. Objectives of the Report This report is delivered to provide a proposal and feasibility study on a retirement resort. The purpose of this report is to provide a study on the market and feasibility of a high-quality home for high income elderly retirees to relax, socialise, stay active and healthy. The team acknowledges interest from the client and also the window of opportunity in which this proposal could be highly feasible and receptive. The client seeks to avoid failures and mistakes of past attempts and has appointed the team to ensure a proper and thorough analysis and study for a proposal of a retirement resort. Key Findings A preliminary capital outlay of $612,662,829 has been derived after a realistic financial analysis of the project. This amount represents the capital required to proceed with land tendering and construction of the proposed development. The residual value of our proposed site is computed to be $456,322,893 with an inclusion of 20% developerâ&#x20AC;&#x2122;s profit. Including an additional 15% sales premium and an added NPV in anticipation of high competitive bidding, the team proposes a tender bid of $527,514,969 for a successful acquisition of the land. The team projects a 100% sale by the end of a 2-year construction period. To prevent a situation of unsold units beyond the stipulated timeline, an exit strategy is proposed to enable all units to be sold within the time frame. This includes enabling flexible lease tenures in the second phase of sales, and a possible leasing scheme in the third phase of sales. 1

Content 1. Demographic Trends ..................................................................................................... 4 1.1 Ageing Population ......................................................................................................................... 4 1.2 Income trend................................................................................................................................. 5

2. Real Estate Market Analysis .......................................................................................... 6 2.1 Retirement Homes in Singapore ................................................................................................... 6 2.1.1 Nursing Homes ....................................................................................................................... 6 2.1.2 Assisted Living facilities .......................................................................................................... 7 2.1.3 Retirement Villages ................................................................................................................ 7 2.2 Current Supply of Retirement Housing ......................................................................................... 9 2.3 Potential Demand for Retirement Housing .................................................................................. 9

3. Target Audience ......................................................................................................... 10 3.1 Chosen Target Group .................................................................................................................. 10 3.2 Needs of Target Group................................................................................................................ 11 3.2.1 Elderly-Friendly Amenities ................................................................................................... 11 3.2.2 Improving social networks ................................................................................................... 11 3.2.3 Healthy lifestyle ................................................................................................................... 11

4. Case Studies ............................................................................................................... 12 4.1 Taiwan ......................................................................................................................................... 12 4.2 Japan ........................................................................................................................................... 12 4.3 USA .............................................................................................................................................. 13

5. Development Concept ................................................................................................ 15 5.1 Concept Overview ....................................................................................................................... 15 5.2 Goals and Strategies ................................................................................................................... 15 5.2.1 High-Quality Environment ................................................................................................... 15 5.2.2 Livable space to enjoy retirement ....................................................................................... 16 5.2.3 Place to feel at Home ........................................................................................................... 17

6. Proposed Development .............................................................................................. 19 6.1 Location Analysis......................................................................................................................... 19 6.2 Chosen Site.................................................................................................................................. 20 6.2.1 SWOT Analysis...................................................................................................................... 21 6.2.2 Development Constraints .................................................................................................... 21 6.3 Specifications .............................................................................................................................. 22 6.3.1 Design Outlay ....................................................................................................................... 22 2

RE3103 Real Estate Development

6.3.2 Units Allocation .................................................................................................................... 23 6.3.3 Facilities................................................................................................................................ 24 6.3.4 Development service ........................................................................................................... 26 6.4 Age Restriction ............................................................................................................................ 27

7. Financial Analysis........................................................................................................ 28 7.1 Investment Timeline ................................................................................................................... 28 7.2 Debt Structure and Interest Rate ................................................................................................ 28 7.3 Direct Comparison Method ........................................................................................................ 29 7.4 Development Costs ..................................................................................................................... 31 7.5 Residual Valuation and DCF Model ............................................................................................. 31 7.6 Profitability Analysis.................................................................................................................... 33

8. Exit Strategy ............................................................................................................... 34 9. Marketing Strategy ..................................................................................................... 35 9.1 Product ........................................................................................................................................ 35 9.1.1 Market Positioning ............................................................................................................... 35 9.1.2 Age Restriction Ratio ............................................................................................................ 35 9.2 Price ............................................................................................................................................ 36 9.3 Promotion and Place ................................................................................................................... 36 9.3.1 Traditional Media ................................................................................................................. 36 9.3.2 Digital Media ........................................................................................................................ 36 9.4 Prospects ..................................................................................................................................... 37 9.4.1 Market Segmentation .......................................................................................................... 37 9.4.2 Focus Group Discussions ...................................................................................................... 37

10. Risks Analysis and Mitigation .................................................................................... 37 10.1 Endogenous Risks...................................................................................................................... 37 10.1.1 Development Risk .............................................................................................................. 37 10.1.2 Demand Risk ...................................................................................................................... 37 10.2 Exogenous Risks ........................................................................................................................ 39 10.2.1 Market Risk ........................................................................................................................ 39 10.2.2 Interest Rate Risk ............................................................................................................... 39 10.2.3 Legislative Risk ................................................................................................................... 39

11. Concessions from the Government ........................................................................... 40 12. References ................................................................................................................ 41 Appendix ........................................................................................................................ 44 Personal Statement & Reflections................................................................................... 68 3

1. Demographic Trends By analysing the mechanics of the ageing population, household income data and other relevant information, the demand for retirement housing can be better gauged.

1.1 Ageing Population Singapore currently faces a critical and rapidly ageing population. According to the governmentâ&#x20AC;&#x2122;s projection (Figure 1), the proportion of senior citizens is set to increase, as marked by the red bars in the figure.

Figure 1: Population Pyramid of Singapore in 1990 (left), 2010 (center) and 2030 (projected) (right) Source: Population SG From Figure 1, a shift in the bulge of the curve is also observed, with the bulge moving upwards. In 1990, the bulge is located at the population in their 30s, but by 2030, these group would be well in their 70s and 80s. At the same time, the narrow base of the pyramid at 2030 indicates a relatively smaller population of the younger generation. A declining support base is thus expected, bringing about increasing pressure on the upcoming working age citizens to support their parents or grandparents. The number of working age citizens to one senior is projected to decline rapidly from 10.4 in 1990 just 2.1 in 2030, as seen in Figure 2.

Figure 2: Support Base of working age citizens to seniors Source: Department of Statistics, Singapore

RE3103 Real Estate Development

The change in demographics can be primarily attributed to the bulk of the baby boomers in Singapore moving towards their silver ages. With their shift into forming the future senior population, they would become an important factor contributing to shifts in the consumer market (MOH, 2006). Taking note of this, this increases the demand for products that are dedicated and related to meet the needs of the elderly, especially the provision of retirement accommodation.

1.2 Income trend

Figure 3: Chart of Median Household Income from Work, Source: Singstat, 2017 According to Singapore's Department of Statistics, as seen in Figure 3, median household income from work among resident employed households in Singapore rose to S$8,846 in 2016 from S$8,666 in 2015, up 2.6 per cent in real terms. As the purchasing power of these individuals increases, their preferences and demand for products would change as well, switching to more luxurious and differentiated products. As this group of working class would eventually make up a significant portion of people entering their silver ages in the near future, they are more likely to opt for relatively more luxurious retirement accommodation options. Therefore, it is an opportunistic move to develop a private retirement residence. When it came to financing their silver aspirations, 2 in 3 of those below 60 years old were found to be actively saving up for their retirement, with personal savings and investments being the most common options. Among seniors aged 60 and 75 years old, the top three financing options were savings consisting of 57%, salary of 45% and reliance on financial support from their children of 40%.

Figure 4: Ministry of Manpower â&#x20AC;&#x201C; Labour force in Singapore 2016 (Released on 26 January 2017)

2. Real Estate Market Analysis In addition to understanding the demographic dynamics of the target population, it is also crucial to have insights into the demand and supply of retirement homes in Singapore. The study into the market will offer us a critical understanding of the wants and needs in order to ensure feasibility in the development of our project.

2.1 Retirement Homes in Singapore The main form of residences for the elderly in Singapore are nursing homes, as can be seen in Figure 5, with a distinct difference seen in the type of elderly care accommodation, as per the number of beds that are available, with nursing homes taking the lead.

Figure 5: Providence of eldercare accommodation in Singapore in 2014 Data Source: MOH, 2017

In addition, there are various other forms such as sheltered and community homes, and day care and rehabilitation centres. More recently, there is a trend of retirement villages emerging as more competent and innovative providers enter the market and try to offer differentiated products. This new concept of retirement homes are getting the attention of retiring seniors who wish to age in comfort. 2.1.1 Nursing Homes As mentioned earlier, nursing homes are the most common and popular type of accommodation for the elderly in Singapore. Typical nursing homes consists of 6- to 8-beds in a room with a fee ranging from $1200 to $3500 per month, inclusive of 10 to 75% of government subsidies. As of December 2016, the total number of nursing home beds stands at 12,800 out of which 11,000 beds are subsidised (MOH, 2017). However, this is not sufficiently adequate for the expected demand, especially with a projected 50,000 beds needed by 2030. This coupled with the strict requirements of entry into the market and as well as the 4-month waiting time, pose as a challenge to meet the rising needs. However, nursing homes are still being perceived in a relatively negative light particularly with the older generation. Part of it is due to the mediaâ&#x20AC;&#x2122;s often negative portrayal of nursing homes, 6

RE3103 Real Estate Development

which creates a stigmatised perception of it. (Jaga Me, 2017) Many would immediately associate such facilities with the old and frail elderly, rapidly declining health, loss of independence, and being mistreated by caregivers. (Jaga Me, 2017) With the usage of the terms “Death Valley” or “Twilight Zone”, it is no wonder that many seniors believe nursing homes to be their last option as an alternate living arrangement. 2.1.2 Assisted Living facilities Other forms of accommodation include sheltered and community homes. These are forms of assisted living accommodation, catered for elderly that are able to move but do not have a family or caregiver to look after them. There is also an emphasis to encourage the elderly to live independently while having on-site care for their medical ailments. There is a growing market for on-demand home care for the elderly, especially with the ageing population and increasing need for healthcare facilities. As such, there are several start-ups such as ‘JagaMe’, ‘Homage’ and ‘eBeeCare’ (Ying, F. J. 2017, April 16) that strive on bringing healthcare to the doorsteps, with affordable services and personalised experiences. At least 6 other startups have been seen to offer pay-per-use home care services. Such services extend out to those with chronic illnesses, physiotherapy as well as other rehabilitation services. Besides community homes, day-cares and rehabilitation centres are also a form of assisted living accommodation in Singapore, though most of them are on a short-term basis. It would cost an estimated $400 to $700 a month before means-testing to stay in such rehabilitation and day care centres (Singapore Silver Pages, n.d.). The market for such accommodation services spread over a huge market with some providers offering facilities with a mix of services. 2.1.3 Retirement Villages In recent years, Singapore has been experimenting with the concept of retirement villages. Retirement villages offer independent living options catered to affluent retirees. At the moment, there is only one completed retirement village in Singapore. “The Hillford”, completed in August 2017, is a 281-unit condominium marketed as Singapore's first retirement village. It is a resort-styled development with a wide array of facilities specifically targeted at active, independent seniors. Prices range from $388,000 for a 37m² one-bedroom unit to $648,000 for a 61m² feet two-bedroom dual-key unit (Siau, 2014). Demand was so overwhelming that all units were sold out on the first day. However, The Hillford does not impose an age restriction on buyers. This defeats the purpose of it being a retirement village as it was reported that a sizeable number of buyers were in their twenties to forties. Similarly, the newly opened “Kampung Admiralty” located in Admiralty contains 104 studio apartments and 2-room flexi flats of 36 or 45 sqm. All units are equipped with a living room, kitchen area, bathroom and bedroom with elderly-friendly fittings and fixtures. It is notable that over 60% of the buyers were residents of the neighbouring Woodlands or Sembawang areas. Schemes such as the Studio Apartment Priority Scheme and Senior Priority Scheme were also useful in giving precedence to the elderly. With the knowledge of what is currently in the local market as well as the several strategies to pull the right target audience, potential providers should also look into overseas markets to make informed decisions that can be applied with Singapore.

RE3103 Real Estate Development

2.2 Current Supply of Retirement Housing As mentioned earlier, the supply of housing units and nursing beds available for the senior population may be underwhelming taking into consideration the rapid growth in the next 10 years.

Figure 6: Housing and Care Options for Elderly People in Singapore Source: The Silver housing challenge (Wu, W.N. & Chow, Y.L., 2017) As seen in Figure 6, which depicts the availability of various housing and care options for the different income-group seniors. As seen in the high and middle-income groups, private and community hospice cares are limited for the group of elderly who are in need of constant medical attention. There are abundant opportunities for private developers to get involved in this market to provide for the middle to high income group, especially due to the lack of provision in certain housing options.

2.3 Potential Demand for Retirement Housing Given the aging population, there is an increasing trend in demand for retirement housing. As observed by TODAY, Singaporeans are looking to assisted-living for old age based on a Lien Foundation survey. (Ming, T,E., 2016) Additionally, they reported that more seniors are willing to live in assisted-living facilities due to the growing dissatisfaction with conventional nursing homes. Although there are various schemes such as the Lease Buyback Scheme, Silver Housing Bonus Scheme and HDBâ&#x20AC;&#x2122;s two-room Flexi Flats that allows HDB owners to monetize their homes, private homeowners have lesser options to extract housing equity. (Faculin, K., 2017) Therefore, current options would only allow private home owners to downsize or move into HDB flats to unlock home equity. (Faculin, K., 2017) Thus, there is a growing demand for private residential developments that cater specifically for seniors. Coupled with an increase in demand from the elderly seeking alternative care options, there is a confidence that retirement housing projects will be met with good demand. 9

3. Target Audience 3.1 Chosen Target Group As of 2016, the number of residents aged 65 and above rounds up to about 0.5 million residents. (Singstat, 2017) There has been a significant increase in residents aged 65 and above in the past decade as the â&#x20AC;&#x153;baby-boomerâ&#x20AC;? generation enter their silver years. This trend is set to continue, with the elderly population projected to nearly double to 0.9 million by 2030. As such, our target audience would be residents who are currently aged 55 and above who are actively looking to plan for their golden years.

Figure 11: Number of Singapore citizens aged 64 and above Our development aims to be an upmarket condominium to be targeted to the middle and upper class in Singapore. Therefore, given the research result in Chapter 1.2, Income trend, we will be targeting the 60th to 80th percentile household income earners of the population ($10,878 - $15,371). With over 80% of seniors aged over 65 suffering from chronic illnesses, the focus from the government has always been geared towards nursing homes. However, over the years nursing homes and hospices have a negative connotation as people fear it to be a less enjoyable way to spend their retired days. Little attention is given to more uplifting options such as retirement homes, and therefore there is a need to provide a new environment for the elderly to consider. Instead of only making improvements to the existing systems, it is crucial for us to offer solutions that goes beyond acute care to long term care that allows the elderly to age in peace, as well as with the community.

RE3103 Real Estate Development

3.2 Needs of Target Group 3.2.1 Elderly-Friendly Amenities A survey last year done by Lien Foundation NTUC Income shows that nearly 50 percent of the 1,000 respondents were willing to live in assisted-living facilities, and would fork out S$1,386 to S$1,745 a month for the arrangement. (Ming, T,E., 2016) The stigma and perhaps the harsh reality of being forced into an old-aged home could be due to the sheer lack of â&#x20AC;&#x153;in betweenâ&#x20AC;? options. This is where our corporation comes in to ensure that the initial good intentions of an old-aged home is being met, yet done with a modern twist of class, dignity and a dosage of smart technology. Our development would prove to be an attractive choice for these retirees as it provides them with a stable and secure home that is similar to their former residence in terms of facilities and amenities. As most condominiums and HDBs are not equipped with elderly friendly fittings such as anti-slip flooring and assisted bars in toilets, our development will aim to meet such needs of our target audience, and aim to provide with superior services. 3.2.2 Improving social networks The strength of social networks and contact play a big role in determining the mental wellness of the elderly. Seniors with physical constraints that disallow them from participating in valueadding activities are most affected with their mental wellness. Financial hardships also play a significant role in determining the challenges the seniors face as well as their openness to engage in social interactions. Those with poor finances are also more likely to have strained relationships with their family and friends. Ageing in place can be possible with social services for the elderly to maintain social ties, instead of growing isolated. Social isolation can in turn be correlated with several other problems such as stress levels, poor mental health and poor quality of life. Also according to the survey by Lien Foundation and NTUC Income, it was found that the elderly preferred to age in their own home and community, independently and comfortably. (Ming, T,E., 2016) 3.2.3 Healthy lifestyle In a survey done by the Institute of Policy Studies (IPS) about the perception and attitudes towards ageing, 88.2% of those surveyed expressed their desire to pursue a healthy lifestyle. (Mathews, M., & Straughan, P.T., 2014) Wellness and health is at the top priority for these elders who wish to incorporate more exercise and healthy living into their lifestyle.

4. Case Studies By studying and analysing global trends in the property types for senior residents, we can find the pivotal issue that requires attention to improve the elderlyâ&#x20AC;&#x2122;s process of ageing in place. We took notable examples from the following countries: Taiwan, Japan and USA, that are redefining the market for retirement and nursing homes, in order to incorporate certain learning points into our own development.

4.1 Taiwan Taiwan is a fast-paced economy facing a critical ageing problem, with the ageing index expected to rise to 86% in 2025. This anticipated issue was tackled with their first concept for a retirement home in 1991. The two following examples are choice destinations for senior citizens. They both vary in size, amenities and concept, as seen in Figure 7 below.

Figure 7: Table of comparison between Chang-Rui Senior Residence and Chang Gung Health and Culture Village

4.2 Japan Japan is a fast-ageing society with the highest percentage of senior citizens in the world, with the senior citizens aged 65 and above accounting for 26.7% of the whole population. Due to the changing mind-sets and preferences of nuclear families, the number of elderly living alone jumped up from 1.1 million in 1985 to 6.2 million in 2015, according to a national survey, White Paper on Ageing Society. (Cabinet Office, Government of Japan, 2016) In such conditions, Japan has two dire problems related to elderly, namely old-old nursing and dying alone. The former refers to the senior citizens who need constant nursing support to live, and this often brings up other psychological effects on themselves and their partners. The 12

RE3103 Real Estate Development

latter refers to the seniors who spend their golden years in solidarity and are often abandoned when struck with serious illnesses. To subside the potential harm from these problems, Continuing Care of Retirement Community (CCRC), originated from the USA is being favoured by the Japanese government. A special task force, â&#x20AC;&#x2DC;Experts meeting for Japanese style CCRCâ&#x20AC;&#x2122; was set up during 2015, and have since been trying to promote CCRC projects in Japan. The following two examples depict the two varied scale of projects being established in Japan for the retired seniors, from which we can adopt the learning objectives and vision from.

Figure 8: Projects for Retired Seniors in Japan; Smart Community Image and Share Kanazawa

4.3 USA The baby boomer generation has changed and reshaped the U.S. economy in the recent decades, especially bringing about the increasing demand of private senior housing market. The report from Harvard Joint Centre for Housing Studies showed that the numbers of Americans aged 65 or older is expected to be 79 million by 2035. The number of elderly above the age of 80 will double from 6 million to 12 million in the next two decades. Therefore, proximately one out of three U.S. households will be owned by a resident over the age of 65. By 2035, among 17 million elderly households, at least one person has a physical disability and millions required assistance on daily housework and activities. Currently, only 1% of current housing stock offer supporting features for the vulnerable elderly. However, the large surge in the senior population required quick action to create more affordable housing, 13

improving accessibility and aging in place strategies, and increasing a range of housing options. Both these examples have adopted a vision that strays away from the features of a traditional retirement home. Atria West 86 adopts an unorthodox hotel concept and Riverwalk Residences recreated a luxury residence into a resort.

Figure 9: Features of unconventional retirement homes; Atria West 86 and Riverwalk Residences

RE3103 Real Estate Development

5. Development Concept 5.1 Concept Overview This segment will explain the development concept and highlight critical factors of the design and operation of a retirement home. The diagram 1 shown below is an overview of the concept highlighting the vision, goals and strategies adopted in ensuring a successful retirement home in Singapore. This will be further discussed in detail below.

Diagram 1: The Vision, Goals and Strategies The team proposes the vision statement to be Golden Sunrise as the overall direction for the proposed development. ‘Golden’ suggests a gold-standard, luxurious living for our residents, whilst ‘Sunrise’ signifies the older generation reaching a new phase of life, ready to age with grace and elegance. The development will therefore be an opportunity for the older generation to reside in a place where they can live their lives to the fullest, while being free of burdens, obligations and loneliness.

5.2 Goals and Strategies To ensure the vision is achieved, a clear statement of what needs to be achieved has to be clearly defined. Therefore, 3 goals are carefully chosen to ensure that the proposed development realises its intended vision. The 3 goals are: High-Quality Environment, Liveable Space to Enjoy Retirement, and Space to Feel at Home. 5.2.1 High-Quality Environment High-quality can be defined as luxurious, exquisite, first-class, and a lifestyle that of a king. ‘Environment’ can be defined as the physical space which influences how a person reacts to the surroundings. As seen in the case studies of Chang-Rui Senior Residence from Taipei, Taiwan and Riverwalk Residence from Fort Lauderdale, USA, the physical design of the space is essential to ensure a quality living environment for the residents. Two specific designs are identified to ensure that residents live in home that will cater to their every need; High-Class facilities and Elderly-friendly facilities. More details are shown below. 15

High-Class facilities ●

●

● ● ●

●

● ●

24-hour concierge service linked to in-room sensors that will trigger an emergency alarm Development constructed using the highest and most superior quality of materials Insulation (Sunset Homes, 2016) Properly treated wood products (Sunset Homes, 2016) Energy-efficient Building Materials; Insulating Concrete Forms, Plantbased Polyurethane Rigid Foam, cool roofing, Low-E Windows (Howstuffworks, 2017) Excellent ambience similar to the luxury provided by golf courses, and fine dining restaurants etc Designer furniture and home furnishings Maximum comfort

Elderly-friendly facilities ● Accessibility Design of the building should minimize effort to walk about to allow for ease of movement ○ Minimal slopes ○ Wheelchair Access ○ Automated staircases ● Safety Design of homes must assist elderly in every way possible. ○ Shower bench ○ Grab bars ● Memory impaired To assist residents who are memory impaired, the building will be designed to assist them in every way possible. ○

Design of wall colours to aid those with poor eyesight

Table 8: Elaboration on High-Class Facilities and Elderly-Friendly Facilities 5.2.2 Livable space to enjoy retirement ‘Enjoy’ or ‘enjoyment’ is defined as a state of pleasure. To help residents achieve a state of pleasure, the development must be satisfactory to our clients, ensuring a liveable place that maximises their happiness and enjoyment within their homes. Thus, the liveability aspect of the development must be addressed. ‘Liveability’ can be defined as the everyday physical environment and place-making. (Wagner, F., Caves, R., 2012) This definition is based off the urban concept of city planning, but can be useful in developing a building for the elderly to live in. Within the definition of liveability as described by Wagner and Caves is the term ‘place-making’, which is a term that seeks to place an importance on the social and cultural aspects of public spaces. Taking inspiration from the ‘Kampung’ concept, it is important we create a development that seeks to address social and cultural dynamics within our development, thus creating a livable space worth enjoying. Therefore, we have identified 3 strategies to assist in reaching this goal; Healthy Living, Community Living and Nature. Healthy Living The word ‘Kampung’ is a Malay term for village. The ‘Kampung’ Concept refers to a laid-back lifestyle that the natives of Singapore are used to before Singapore became urbanized. Taking inspiration from the laid-back lifestyles of kampungs, the best way to enjoy retirement is to be physically and mentally healthy. Thus, amenities selected for the development will address the physical and mental wellness needs of our residents. Community Living 16

RE3103 Real Estate Development

The term ‘kampung’ is often referred to as a way of life. According to the residents of Lorong Buangkok, the way of life in a kampung is far superior to the average HDB dweller because of the “space and neighbourliness that HDB living does not offer” (Chua, A., 2017). The term ‘Kampung’ is always linked with the ‘Kampung Spirit’, translating into community living where people interact and help each other as a social norm, and always welcoming people from all walks of life (Chua, A., 2017). The harmonious and integrated neighbourhood offer interactive community life that provide higher level of liability. Therefore, an open public space and outdoor courtyard will be planned in the project. Besides, the age restriction of our residence will be imposed. Nature There are benefits associated with nature, as evident from the vast majority of developers who integrate nature into their new developments. Benefits of nature include positive medical and psychological benefits, such as improved short-term memory, stress relief, better vision, improved concentration, immune system boost, improved mental health and reduced risk of early death among many other benefits (Business Insider, 2016). In view of these benefits, we seek to integrate nature with our development, thereby bringing nature closer to residents. 5.2.3 Place to feel at Home The development must feel like home for the residents. To help them ease into their new homes, 3 strategies have been identified; Smart Living, Assistance and Privacy. Smart Living Equipment Technology can play a big role in ensuring that our clients feel at ease. In-house features such as sensors to detect if a person has fallen or if there are no movements for a significant period of time when residents are home can prevent a life and death situation from occurring. Buzzers can also be included to notify family members or emergency services if help is needed.

Figure 10: Examples of smart living equipments

Smart Living Privacy Privacy is a key topic in ensuring that residents feel safe and secure at home. Since technology and new media is prevalent in our development, privacy may become an issue. The information exchanged between users, software developers and third parties is at risk of security breaches as it is not fully secure. Therefore, security guidelines will be implemented to ensure residents’ information are kept secure and confidential, keeping residents’ minds at ease with regards to privacy issues. Monitoring of home conditions will only be done after permission is given by residents. Furthermore, the home applications and other technological systems used within the building will abide by Personal Data Protection Act (PDPA) 2012 by the Personal Data Protection Commission (PDPC). In terms of physical privacy, a 24/7 Security team consisting of 2 guards and 1 management officer will be on standby every day and night ensuring tight standards of non-trespassing activities. This service can be outsourced to Certis Cisco or Aetos Security. Assistance Assistance will be provided to ensure security for the residents, similar to having a ‘parental’ figure taking care of them. To address this issue, we propose having personal assistants and nurses on-site to attend to any medical issues. In addition to that, there will also be two paramedics on standby duty with relevant first aid and CPR skills and a general practitioner, to ensure the level of preparedness for any sorts of medical emergencies. It is important to have these personnel because not only do they provide care and attention, they build a relationship with residents. Relationship-building is essential because current practices in nursing homes lack the social factor when it comes to seniors and their assistants, and when this relationshipbuilding is not prioritised, the regimented care eventually leads to depersonalisation, loneliness and diminished quality of life. (Koh, G., Yap, P., 2016) To ensure the quality assistance are provided, the team proposes outsourcing these services to a specialised aged care company. This is to ensure that residents feel at ease in their homes and simultaneously receive the maximum possible assistance. ‘Homage’ is a specialised aged care company that provides services such as home care, nursing care, and home therapy.

Diagram 2: Proposed Specialised Aged Care company

RE3103 Real Estate Development

6. Proposed Development 6.1 Location Analysis The team has selected 3 sites for consideration: Chun Tin Road, Fourth Avenue and University Road. These sites are chosen based on location, accessibility, amenities, and view. We will consider both the pros and cons of each location and choose the best location based on the stated requirements. Chun Tin Road

Fourth Avenue

University Road

Site Area

6,302.2

18,532

14,100

Land Use

Residential (NonLanded)

Residential (Landed)

Gross Floor Area

8,823

33,358

19,740

Date of Award

28 July 1997

6 November 1993

Lease Period

99 years

Status

Development completed

Available for Application

Development completed

Successful Tenderer

Far East Organization Centre Pte Ltd

Habitat Properties Pte Ltd

Successful Price

$27,359,000

$42,680,000

Tender

Table 8: Site Details of Chun Tin Road, Fourth Avenue and University Road (Source: URA) Based on table 8, Fourth Avenue has the highest GFA amongst the three sites. Fourth Avenue is a site under the reserve list of the Government Land Sales (GLS) programme, whereas Chun Tin Road and University Road are complete developed since 2005 and 1997 respectively, named Meadow Lodge and University Park.

Diagram 3: Sites of Chun Tin Road, Fourth Avenue and University Road

As seen in diagram 3, all three sites are located in Bukit Timah, with Chun Tin Road located at Upper Bukit Timah in District 21, while both Fourth Avenue and University Road are along Bukit Timah Road and Dunearn Road in District 10. Chun Tin Road Accessibility

● ● ● ● ●

Amenities

● ● ●

Fourth Avenue

Upper Bukit Timah Road Pan-Island Expressway (PIE) Clementi Road Dunearn Road Beauty World MRT Station

●

Bukit Timah Shopping Centre Beauty World Centre Bukit Timah Nature Reserve

●

● ● ●

●

University Road

Bukit Timah Road Dunearn Road Pan-Island Expressway (PIE) Sixth Avenue MRT Station

●

Singapore Island Country Club Singapore Botanic Gardens

●

● ● ● ●

● ●

Bukit Timah Road Dunearn Road Adam Road Farrer Road Botanic Gardens MRT Station Singapore Island Country Club Singapore Botanic Gardens Adam Road Food Centre

Table 10: Accessibility and Amenities around Chun Tin Road, Fourth Avenue and University Road According to table 10, all three sites have well accessibility with different types of transport. There are plenty of roads and expressways connecting all three sites to the north, south, west and east regions of Singapore, with an MRT Station within close vicinity to each site. Amenities are similar across all three sites, with Chun Tin Road closer to shopping and dining options as compared to Fourth Avenue and University Road. All three sites are close to a nature park, which can cater to nature-loving residents.

6.2 Chosen Site Based on the location analysis of the 3 sites, the team has decided that Fourth Avenue is the best option. A strengths, weaknesses, opportunities and threats (SWOT) analysis will be conducted to elaborate on why Fourth Avenue is the best choice amongst the three sites.

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6.2.1 SWOT Analysis Strengths

Weaknesses

1. Prime District 10 location in Bukit Timah 2. Quiet; Serene 3. Large GFA 4. Good accessibility Opportunities

1. High development and land cost 2. Development site constraints and stringent design requirements 3. Lack of amenities Threats

1. GLS sites easier to procure for developers as they are offered unencumbered 2. General positive residential real estate market outlook 3. Positive sales record in residential transactions in vicinity 4. Limited plots of land left for District 9,10 and 11

Traffic congestion

6.2.2 Development Constraints The tenderer for the Fourth Avenue land parcel is required to comply with the following planning and urban design requirements in accordance to the siteâ&#x20AC;&#x2122;s tender conditions. 6.2.2.1 Planning Parameters Planning Parameters

Provision/Requirement

Type of Proposed Housing Development

The proposed residential development shall be for: a) Condominium; or b) Flats; or c) With prior written approval, a combination of flats and strata landed houses Serviced apartments shall not be allowed

Permissible Gross Floor Area (GFA)

30,023 đ?&#x2018;&#x161; (minimum) -33,358 đ?&#x2018;&#x161; (maximum)

Building Height

A maximum 10-storey zone, maximum 6-storey zone and maximum 2storey zone as shown on the Height Control Plan in Appendix N. Note: All buildings and fixtures shall not exceed 153m Above Mean Sea Level (AMSL).

Visual Screening

The view to the south-east, south and south-west of the Land Parcel located at a height of 26.80 m AMSL and above are subject to the visual control requirements as shown on the Visual Control Plan in Appendix O.

6.2.2.2 Vehicular and Bicycle Parking Provision As the site is within 400m radius from Sixth Avenue MRT Station, the successful tenderer is required to apply to LTA to take up a 20% reduction under the Range based Car Parking Standards (RCPS) for the residential component. In addition, the design of the parking place shall allow for adequate vehicle queuing length within the development for the vehicles entering to prevent causing congestion along the main road. To facilitate cycling as a type of transportation to major transport nodes and key amenities, the successful tender is required to construct and provide bicycle parking(s) within the land parcel at a ratio of 1:6 lots to dwelling units. 6.2.2.3 Covered Linkway The successful tenderer is to build a proposed 2.4m wide covered linkway to connect the future development to the existing covered linkway, as shown on the Control Plan in Annex M. 6.2.2.4 Demolition of Existing Buildings within the Land Parcel The land parcel consists of existing buildings which will have to be demolished by the successful tenderer at his own cost and expenses, as shown on the Control Plan in Annex M. 6.2.2.5 Road works The successful tenderer is required to widen and realign Fourth Avenue and make necessary junction improvement works to Bukit Timah/Fourth Avenue, as shown indicatively on the Control Plan in Appendix M.

6.3 Specifications 6.3.1 Design Outlay

Figure 11: Artistic impression of Retirement village 22

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According to site regulations and our concept, the project is a middle-to-low density village. The total floor ground floor area is 33,350 sqm. It includes 80% net sell/lease area, 10% public facility area. As the layout in the following figure shows, the development will separate into a building cluster around the main private park and the building facilities will be on the first floor. The building cluster will be subdivided into three towers: A, B and C, as seen in Figure 12 due to considerations such as unit size and proximity to facilities.

Figure 12: Building Specifications of the Towers 6.3.2 Units Allocation Four types of units are proposed: 2 bedroom (2BR), 3 bedroom (3BR), 4 bedroom (4BR) and penthouses at a proportion of 30%, 40%, 25% and 5% respectively. The different options will ensure that clients have the option to select the ideal unit size that suits their preference. The 2BR and 3BR will be set in Sector A and C which has direct access to the MRT line and which is also near the communal health facilities for high convenience. 4BR and penthouses will be located in Sector B which will offer a more private residential space for the seniors who share it with their family. Unit Type

Size (sqm)

Total No. of Rooms

Location (Towers)

2 Bedroom

146

A1, C1, C2

3 Bedroom

156

A1, A2

4 Bedroom

B1, B2

Penthouse

125

Total units

394

Table 11: Breakdown of Unit Type 23

Figure 13: Impression of Unit x 6.3.3 Facilities As seen in the development concept in Chapter 5, the development will provide high-end facilities, a comfortable environment and useful services for the seniors to age in grace, according to the 3 goals. An overview of the facilities found can be as seen in Figure 14 below, followed by the floor area assigned to each of these facilities as seen in Figure 14.

Figure 14: Overview of the facilities found in the development

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6.3.3.1 High quality environment The exterior will be designed in a way that encompasses a luxurious landscape using calming colours and texture such as green overlays. This will give a sense of relaxed feeling, life and new beginnings. Wheelchair lanes will also be provided to assist the residents and families who need it. 6.3.3.2 Healthy Living The development will consist of high-end medical facilities that will provide for residents who may require medical attention. The library and a prayer room will be provided to ensure the mental well-being and religious needs of the seniors are taken care of. They will also be encouraged to keep up with an active lifestyle with the provision of a swimming pool, fitness centre, and tennis and basketball courts within the development. 6.3.3.3 Community Living Amenities such as a restaurant, hobby & crafts room and communal shared spaces will reflect the ideals of a traditional kampung. Common interaction lounges can be utilised to encourage socialising amongst residents. It can accommodate activities such as karaoke, mahjong games, dance classes and will act as an avenue for fellowship amongst residents. 6.3.3.4 Nature A picturesque and green environment can be sought with landscaped gardens that allows residents to enjoy nature up-close, whilst getting hands-on with the upkeep of the gardens. Urban farms will be a communal activity as well as a personal encouragement for residents who are keen on planting fresh fruits and vegetables. This is similar to the Community in Bloom programme in Singapore, which is a gardening initiative implemented by the National Parks Board in housing board estates (NParks, 2016) where residents are able to maintain a community garden as their own.

Figure 15: Gross Floor Area of all facilities listed 25

6.3.4 Development service Aside from providing an all rounded, conducive environment and complementary physical facilities to fulfil the goal of place feel at home, personal services and the use of technology device will also be extensively provided. As mentioned in Section 5, control sensors and equipment will be seamlessly integrated into the units. Secondly, external services from ‘Homage’ will be outsourced to provide private home services and medical treatments. 6.3.4.1 Personal Care Services The development will work together with the service provider ‘Homage’. After sale, the buyer will be contracted to ‘Homage’ which will provide personal care services to the residents, which can vary from helping in daily life to nursing care for the ill. The services are shown in Table 21 below. All these services are payable by every resident whom are willing to take up these value-added services and therefore, will be user-based. However, there is an exception to the 24-hour concierge service, which is automatically chargeable to every unit. 6.3.4.2 Technology In order to facilitate the daily lives of the residents, various technological devices including the use of motion sensors and wireless connectivity will be provided. Several of such facilities and equipment have been proposed as seen below while full details can be found in the appendix.

Services

Required in the contract:  24-hour concierge service Pay-based service Nursing Care Services  Medication administration  Respiratory care  Tube/ Catheter Care Care and attention in daily life  Personal meal plan and health care  Weekly housekeeping and daily bed-making  Weekly personal laundry and linen services  Scheduled transportation to local appointments, errands and outings  Available town car services  Barbershop and salon services, including manicures and pedicures  Dining with full table service and room service

Technology Equipment

  

Bathroom-assisted equipment Emergency alert system Medication management system BeClose:  Tracks daily routine using discreet wireless sensors  In case of disruptions, remote caregivers will be alerted by phone, e-mail or text message TV Ears:  Assists people with hearing loss  Provides an acoustically sealed chamber within the ear that reduces room noise and provides comfort, cleanliness and clarity for word discrimination GreatCall Responder:  Conference for family or friends  Dispatches 911 emergency services

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 



In-house catering for special occasions with family and friends Maintenance of apartment, community and grounds

Calls for a nurse or provides any additional assistance, if needed

Table 12: Services and Smart Technology

6.4 Age Restriction Age restriction policies will be imposed to specifically target the chosen target audience. The Hillford Condominium is a prime example of how the lack of age restriction policies failed to target their specific target audience to create an ideal community home for the elderly. Instead of drawing significant interest from senior buyers, investors in their early 20s, 30s and 40s took up majority of the housing stock from the project. Therefore, there is a need to make sure that retirees and pre-retirees over the age of 55 are keen to take up the retirement village development in order to create a community that was envisioned. Age restriction has its benefits. Firstly, there is evidence to suggest that there are price differentials when housing units are subject to restrictions against non-retirees. Allen, in his paper on “Measuring the Effects of Adults-Only Age Restrictions on Condominium Prices”, deduced a 10% premium on transaction price on the age restricted condominium as compared to the average condominium and a significant demand for age-restricted condominiums. This suggests that age restriction resulted in a net increase in demand as interested buyers are willing to pay a premium to live in a “seniors-only” community. (Allen, M.T., 1997). This is emphasized by Guntermann and Thomas, whom deduced that seniors who desire to live in age-restricted communities are willing to pay a premium of nearly 18% as found by their research. (Guntermann, K.L., Thomas, G., 2004). Secondly, there may be a psychological effect that drives seniors to purchase age-restricted properties. As noted by Guntermann and Thomas, the willingness of the seniors to pay for the premium on age-restricted properties may be due to the designation of the property as being age-restricted, as it acts as an assurance that the property’s bundle of attributes will not be diluted by non-elderly families. (Guntermann, K.L., Thomas, G., 2004) Collectively, the research journals published show a link that consumers are likely to be more willing to pay a premium for homes with a community that is of a similar age category as themselves. Thus, by implementing an age restriction, a product that is more desirable is created. Although the benefits garnered from an age restriction clause is significant, property sales will prove to be a challenge. The challenge lies in selling all 394 units to the proposed target audience given the imposed age-restriction clause. Further risk assessment will be discussed in section 9.1.2, whereby the ratio of age restriction will be implemented to ensure that an ideal age demographic mix can be achieved while maintaining a retirement home concept and the premium branding that comes along with it.

7. Financial Analysis 7.1 Investment Timeline Assuming a site trigger date of December 2017, the tender site is expected to be awarded in March 2018 with a 4-month tender period given when the site is launched for sale. Following successful acquisition of the Fourth Avenue land parcel, an upfront lump sum tender will have to be paid within 3 months of the site award date. As shown in the investment timeline, construction of the project will commence 6 months after site acquisition. A 2-year construction period is given to ensure sufficient time for completion. When construction starts, sales will begin to minimize the developer’s risk by capturing as much pre-sales as possible to cover the initial capital of development. The capital can be subsequently used for further marketing and sales effort such as setting up showflats, hiring agencies, independent agents as well as online marketing. The sales will be split into 3 phases: Phase 1 will sell 30% of sales volume, while Phase 2 and 3 will sell 35% of sales volume each over a 12-month period. This will be further elaborated in the ‘Exit Strategy’ section.

Apr-18

Oct-18

Jan-19

Jun-19

July-19

Dec-19

Acquire Land Construction Sales Phase 1 Sales Phase 2 Sales Phase 3

Figure 16: Timeline of various stages of Development

7.2 Debt Structure and Interest Rate In selecting the debt structure, a number of factors are taken into consideration.

Diagram 4: The Relationship between LTV ratio, DCR and IRR on Equity 28

Oct-20

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Firstly, Leverage is an investment strategy that increases the potential return of an investment. Therefore, it is important to borrow debt to generate a higher total return on equity, rather than finance the project by full equity. Secondly, selecting the debt to equity (DE) ratio is important as it will affect the rate of return on equity. Leverage that is too high will result in a smaller Debt Coverage Ratio (DCR) and a larger Loan to Value (LTV) ratio, which will increase lender’s risk as a potential market downturn will reduce borrower’s ability to repay debt, whilst leverage that is too low will result in an inability to maximise yield of leverage, even though the risk of defaulting on the loan during a market downturn is lesser. Therefore, a DE ratio of 70:30 is chosen to maximise yield of leverage. The estimated interest rates for construction and land cost borrowings for the project will be 5.5%.

7.3 Direct Comparison Method The Direct Comparison Method (DCM) is used to ascertain the unit price psm. The selected comparables are Sixth Avenue Ville, The Tessarina and Fifth Avenue Condominium. Dates of sales, size, location and land tenure are adjusted to ascertain the estimated value per sqm for Fourth Avenue land plot. The full adjustments can be found in Annex J. Property Details

Fourth Avenue

Sixth Avenue Ville

The Tessarina

Fifth Avenue Condominium

Date (PPI)

Sales

65.60%

56.60%

32.60%

per

13.49%

-12.87%

10.96%

Location (1% per walking-minute to nearest MRT)

3.00%

10.00%

2.00%

Total Adjustment

82.09%

53.73%

45.56%

Adjusted Price per sqm per GFA

$28,048.21

$20,601.74

$25,224.82

Land Tenure Adjustment (based on Ballas Table)

$26,926.29

$19,777.67

$24,215.83

Estimated Value per sqm per GFA

$23,639.93 psm or

Size (1% 1000 sqm)-

$2,196.20 psf

Table 13: Summary of Adjustments using Direct Comparison Method Based on the comparables adjustments as shown in the table above, the estimated price per sqm per GFA is $23,639.93, or $2,196.20 psf. As such, the total estimated GDV is $788,579,706.70. As the development will be Singapore’s first retirement village, a DCM is done to determine if there is a price differential between retirement condominiums and the average condominium in Singapore as shown in table 14. From the analysis, an 8.67% premium is found over 3 average condominiums, namely Meadow Lodge, Grand Chateau and Terrene Condominium. 29

Full details can be found in Annex K. Furthermore, as shown in Section 6.5, premiums exist on transacted prices in age-restricted properties. Given that the development will be agerestricted, a 15% premium is reasonable to be added onto the estimated price determined by the initial DCM, thus achieving the selling price of the units. Property Details

Hillford

Meadow Lodge

Grand Chateau

Terrene

Size (1% 1000 sqm)-

per

2.90%

3.43%

-3.30%

Location (1% per walking-minute to nearest MRT)

5.00%

1.00%

3.00%

Total Adjustment

7.90%

4.43%

-0.30%

Adjusted Price per sqm per GFA

$11,788.74

$9,992.83

$13,186.67

Estimated Value per sqm per GFA

$9,722.52 psm or

Premium

+$11,989.41 or 8.67%

$903.24 psf

Table 14: Summary of Price Differential Analysis of Hillford using Direct Comparison Method

As such, the new selling price per sqm per GFA is $27,185.92 and the total estimated GDV to be collected from the sale of the residential component amounts to $798,042,681.60. The comparables used and its adjustments can be found in Appendix D.

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7.4 Development Costs To determine the Gross Development Value using the residual method, the total development costs has to be determined first. Using the Arcardis Singapore 2017 Construction Cost (shown in Appendix H, the total constructions cost is calculated to be $85,147,860.80. Including the land purchase using an interest rate of 5.5% with a holding period of 2.5 years, the total development costs is $614,122,201.35 as shown in Table19 below. Development Cost Initial Land Cost

$368,825,819.70

Land Purchase Stamp Duty and Legal Fees (4.5%)

$20,534,530.20

Holding Cost of Land (5.5%)

$62,744,397.85

Construction Contingency & Marketing Fees (5%)

$3,502,585.80

Professional Fees (5%)

$3,502,585.80

GST on Building Cost, Professional Fees & Contingency (5%)

$3,852,844.38

Financing Cost (5.5%)

$4,238,128.82

Property Tax (10%)

$5,704,036.17

Total

$614,122,201.35

Table 19 : Summary of Development Costs

7.5 Residual Valuation and DCF Model In order to determine the bid price and financial feasibility of the project, the land value of the project was ascertained by utilising the Direct Comparison method and income method to find the GDV for the development. This is followed by the residual valuation method to find the land value. Gross Development Value Tower A1

$171,271,296.00

Tower A2

$186,359,481.60

Tower B1

$154,959,744.00

Tower B2

$222,108,966.40

Tower C1

$16,311,552.00

Tower C2

$40,778,880.00

Total

$798,042,681.60

Table 15: the development value of each building The Gross Development Value (GDV) determined is $798,042,681.60. Using the residual method, we found that the land value is $456,322,893.44. The breakdown of the unit type price psf is illustrated in the excel spreadsheet in Appendix D. By utilising the residual valuation method, the achieved residual land value of the development is $456,322,893.44, or $13,679.58 psm per GFA. Applying this value to a DCF model with an assumed debt to equity ratio of 70:30, an NPV of $71,192,075.72 (discount rate of 12%) and IRR of 21.69% is achieved. However, as competitive bidding is expected for the Fourth Avenue land parcel due to its excellent development and investment potential, a premium of $71,192,075.72 was added to the land value achieved by the residual valuation method. With this premium, the land cost of the development adds up to $527,514,969.16, or $15,813.77 psm of GFA. With this land price, the expected NPV and IRR is $10,753,699.73 and 13.52% respectively as shown in Table 16.

Investment Summary Residual Land Value Land Price Net Present Value

$456,322,893.44 $71,192,075.72

Residual Land Value with Premium $527,514,969.16 $10,753,699.73

IRR

21.69%

13.52%

Table 16: Summary of DCF Analysis

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7.6 Profitability Analysis Profit Analysis Total Sales Total Costs Profit Holding Period Return Return on Investment

$835,338,365.60 $641,122,201.35 $193,216,163.25 23.25% 30.29% Table 17: Summary of the Profit Analysis

Profitability analysis is conducted to ensure that the development is profitable and sustainable, which allows the investor to maximise his wealth. As shown in Table 17, the holding period return is 23.25%, which indicates that the rate of return over the whole period which the land was held is healthy, while the return on investment is 30.29%, which indicates a healthy profit over the total costs of the development. From our Residual Valuation analysis, a valuation of $456,322,893.44 has been derived for the residual value of the subject plot. Even after taking into account a developerâ&#x20AC;&#x2122;s profit that is 20% of GDV, there is a NPV of $71,192,075.72. Therefore, we would recommend a premium on top of residual land value to be submitted for a land tender capped at an amount that is equal to NPV.

8. Exit Strategy Based on the current bullish outlook for the property market and the unique nature of the proposed development, a comprehensive marketing plan for the development’s exit strategy is strategized. In the unlikely event that sales do not perform as well as expected, the team has put in place a contingency exit plan. The exit strategy will be divided into three separate phases.

Diagram 5: Overall Exit Strategy Phase 1 Opening sales weekend will be priced at a 5% discount. This will entice prospects to make early commitments to the purchase while at the same time, it is easier for our appointed marketing agents to close sales transactions. A successful opening weekend will generate positive publicity for our proposed development, which is instrumental for the next two sales phases to be successful. The target set for this marketing phase would be 30% of the available units. Depending on how quick the sales transactions are completed, pricing decisions will be altered accordingly in the next two phases. Phase 2 The next 35% of units will be sold in Phase 2. Depending on the take up, the units will be priced 10% higher than the price per unit psm. This would ensure that profit would be maximised. Flexible lease tenures will also be released to cater to different financial capabilities and preference of prospective buyers. This includes offering different lease tenures from 30 years to 99 years. If buyers are willing to buy 99-year leases, developer’s risks can be reduced, while if there is poor demand for 99 year leases, developer’s risk would have to be increased to sell short term leases in order to ensure 100% sales. This is similar to the HDB “2-Room Flexi” Scheme, whereby it provides a flexibility in allocating units of similar sizes so as to meet shifting needs of residents (Wu, W. N. & Chow, Y. L., 2017). To prevent abuse of shorter lease tenures, units shorter than a 99-year lease may not be sublet or sold in the open market, much like the 2-Room Flexi Scheme. Phase 3 The remaining 35% units will be sold in Phase 3. The units will also be sold at a premium that is 10% higher to maximise profit. If there are still insufficient take up, units will be leased out to interested parties, subject to minimal lease of 30-years lease tenure. 34

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9. Marketing Strategy The marketing strategy will comprise the following tactics: Market Positioning, Price, Promotion and Place, and Prospects. More details will be discussed below.

Market Positioning Price Promotion and Place Prospects

• Age Restriction Ratio

• Price Differential Premium • Traditional Media • Digital Media • Market Segmentation • Focus Group Discussions

9.1 Product 9.1.1 Market Positioning The development is fully geared towards catering to the needs and best interests of the elderly. As a premium retirement resort, the development will ensure that the retiree’s needs are fully addressed through the physical design of the space, combined with nature, sense of community, smart living, assistance and privacy. The plethora of amenities and facilities would ensure that the development is unlike other regular condominiums as the development is specially designed and planned to ensure residents receive a gold-standard of living during their retirement. With the development being located in a prime residential estate, the amenities in the area is second to none. The Singapore Island Country Club north of the development would cater to golf-loving residents, and provides a place for a getaway. The Singapore Botanic Gardens also provides a place for residents to immerse in nature, alongside the nature in-built into the development. 9.1.2 Age Restriction Ratio To ensure that the property is fully sold, a 60:40 age restriction ratio will be implemented. This ensures that 157 units out of 394 units are opened up to interested buyers other than the target group. (Refer to table 18) The age restrictions will be imposed on the occupiers of the housing unit rather than the owner of the apartment. This creates greater flexibility for purchasers and agents marketing the property. In the event where children are interested to make purchase of the subject property for their aged parents as a retirement gift, they may do so by listing themselves as sole or even joint owners of the property while naming their aged parents as occupiers of the subject unit. 35

Age Restriction Mix Age-Restricted Units (60%)

237

Non Age-Restricted Units (40%)

157

Total Number of Units

394

Table 18: Age Restriction Mix Besides ensuring a full take up on sales, having a diverse mix of residents has its benefits. Mixed generation housing models provide an environment that facilitates interaction between the elderly and younger residents, as seen frequently in Denmark and Sweden (Wu, W. N., Chow, Y.L., 2017). This intergenerational co-housing model has provided a sense of social support for the elderly residents, as being in an age-restricted community may increase social isolation and depression amongst the older generation (Wu, W. N., Chow, Y.L., 2017). Hence, opening up 40% of units to the non-target group would promote co-mingling and mutual support amongst residents. This would ensure a creation of a community that is vibrant and diverse. Overall, the 60:40 age restriction ratio would ensure smooth opening sales on the weekend without the age-restriction posing as a hindrance.

9.2 Price A Direct Comparison Method (DCM) was used to deduce a price differential between Hillford Condominium and 3 comparables, namely Meadow Lodge, Grand Chateau and Terrene Condominium (Refer to Annex K). Adjusting for size and locational differences, a premium of 8.67% was determined. Along with studies done on age-restricted condominiums highlighting the existence of premiums (as highlighted in Section 6.4), a reasonable premium of 10-15% is proposed to be added into the sale price of the development. The achieved price per unit sqm per GFA is $27,185.92.

9.3 Promotion and Place 9.3.1 Traditional Media Traditional forms of advertising are still crucial in ensuring the target audience is targeted. A physical showroom will be set up to give prospective buyers a sense of space and idea of what the units will look like, while newspapers, television advertisements, radio advertising and banner advertisements will be used to ensure a high public outreach of the project. 9.3.2 Digital Media In the new age, Singapore has the highest smartphone penetration rate, with nearly 9 out of 10 Singaporeans having access to a smartphone, according to a survey done by Deloitteâ&#x20AC;&#x2122;s Global Technology, Media and Telecommunications (Today, 2015). Therefore, it is only logical that digital media advertising is deployed to reach out to consumers and prospective buyers. This would include search engine optimization, pay-per-click advertising, content marketing, social media and email marketing. Most importantly, digital media should allow prospective 36

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buyers an access into the digital showroom, which is commonplace in todayâ&#x20AC;&#x2122;s real estate business (Kit, T. S., 2016). This would ensure the highest possible outreach to consumers and prospective buyers.

9.4 Prospects 9.4.1 Market Segmentation The target market segment will include middle to high income earners that are above the age of 65 years old who are seeking to live in an elderly-friendly, elderly-majority development, located in a prime residential estate in Bukit Timah, District 10. As mentioned in the market analysis, the middle to high earning income retirees keen on living in a luxurious retirement lifestyle development would be attracted to this prospect. 9.4.2 Focus Group Discussions Focus groups will be set up to understand the needs and expectations of well-to-do retirees. As a development that targets the middle to high income earners, this discussion is crucial and urgently needed. Identifying the desired features and luxurious lifestyles that these individuals expect would be necessary in defining whether the development will be a success or a bust.

10. Risks Analysis and Mitigation The development of such a large-scale project is not free from risks. Hence it is imperative to analyse and mitigate these risks effectively. Risks will be split into endogenous and exogenous risks.

10.1 Endogenous Risks Endogenous risks refer to risks inherent in the project. As such, Development and Demand risks are expected. 10.1.1 Development Risk Just as well as other real estate development projects, the developer would be exposed to development risks, such as cost overrun or delay of construction. Particularly in this project, there are various facilities such as the outdoor pool, gym and library that needs to be constructed. Given the complexity, high-level construction management should be required. Moreover, credit and interest risks are attached to construction phases, as construction cost would be founded by debt. Considering the complexity of retirement village development, a specialised construction firm will be engaged for construction of the development. As with all developments, the developer will bear the risk of the project during its development stage. In order to minimize the risks associated with macroeconomic conditions such an interest rates, which have a direct impact on cost of materials used for the construction of the development, the team proposes to keep the construction phase as short as possible up to a maximum length of two years. 10.1.2 Demand Risk 37

Consumer demand may fluctuate depending on market conditions. In addition, the chosen target group is very specific and may not attract enough demand from that group. In anticipation of this, a 60:40 age-restriction ratio is implemented to ensure that this demand risk is alleviated, thus ensuring a complete sell out. Furthermore, there is a growing interest in specialised development, especially retirement resort concepts. Although relatively new in Singapore, retirement resort concepts will soon meet a higher demand from prospective buyers seeking to live in a luxurious retirement lifestyle. It is noted that there is a stigma attached to â&#x20AC;&#x153;retirementâ&#x20AC;? homes. Traditionally, retirement homes include people that are frail and retired, and heavily relying on assistance to attend to their daily needs. To prevent this sort of sentiments for this project, the team has marketed the development as a premium retirement resort that would transform the notion of retirement homes. This should ensure that the negative stigma attached to retirement homes would change amongst consumers, potentially increasing consumer demand for such projects.

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10.2 Exogenous Risks Exogenous risks refer to risks that originate from external sources that are not part of the project. Market, Interest Rate and Legislative Risks are identified as problems that are out of the private sectorâ&#x20AC;&#x2122;s control, and which may need an anticipated approach. 10.2.1 Market Risk Even though our project is the first retirement village in Singapore, there are some competitors out of the same category, namely nursing homes and home care services. According to the national survey, 95% of elderly people want to end their lives in their own home. On the other hand, 90% residents of nursing home are satisfied with the environment despite of critics by researchers. Judging from these data, Singaporeans seem to be satisfied with the present condition for the elderly. This implies that developers of retirement villages have to create the demand. Considering that Singapore society is aging year by year, many other developers are also expected to develop similar projects. Therefore, the project has to be outstanding in order to compete with similar intentions from competitors. The essential way to mitigate market risk is to estimate market demand accurately as there are no precedent projects in Singapore. Thus, the project team has to test the market through its development and promotion. In order to test the market carefully, marketing stages should be divided into some phases so as to amend pricing slightly, based on situation of prior phase. The details of marketing strategy are elaborated in Section 8.3. 10.2.2 Interest Rate Risk As the Singapore Interbank Offered Rate (SIBOR) is pegged to the US interest rates, any movements in US rates will affect Singapore interest rates inadvertently. Therefore, Singapore is vulnerable to domestic and regional market conditions that will affect the financing of the project. Given the domestic uncertainties in the US political arena coupled with the uncertainties with China and North Korea in handling a regional crisis, interest rates might shift drastically without any warnings. In anticipation of the risks presented, careful monitoring and predictions of interest rate movements due to regional and domestic affairs must occur to prevent and minimise potential risks to the project. 10.2.3 Legislative Risk Due to the presence of various legal restriction and conditions for sites put up for tender, the project may be affected by delays due to changes in legislative policies. Future changes to legislations such as government cooling measures are difficult to predict, given the volatile market conditions. Thus, it is imperative that legislation changes could affect the private sector, further impacting the project. As this project is a private development, there is a greater flexibility with regards to ideas to be implemented. This project is designed to be profitable even without subsidy from government. However, the national policy on aging society still has influence on retirement villages. In the future, the government may introduce public housing that caters to retirement living which could prove to be direct competition to our proposed development. In spite of perceived future competition, our proposed development will stand the test of time given that 39

it is targeted towards the upper class in Singapore. In addition, the premium location and nearby amenities makes our proposed development a one-of-a-kind place of residence. All in all, our proposed development would be able to stand the test of time to remain a premium choice for retirement living.

11. Concessions from the Government The government has had the most difficult of jobs attending to the needs of the rapidly ageing population. With a rising trend of retirement homes instead of the still prevalent traditional â&#x20AC;&#x2DC;home of the agedâ&#x20AC;&#x2122;, there is a higher expectation to provide a higher quality life to the elderly and retirees. Developments such as this retirement home would be the bridging unit for the government to serve the society and provide care for the aged. There is a need for the government to be answerable to approving and planning for more developments catered to the retirees, and also to give the necessary support for developments serving a national agenda. Specifically, the government can offer incentives and tax rebates for developments proposing a higher percentage of elderly-friendly facilities and features, while hitting a high building efficiency ratio. If Singapore could build a nation that is prepared to grow old together, the fears of the masses regarding the ageing population would dissipate. The government would then be seen to achieve their social agenda of creating an all-inclusive society catered towards the elderly, supporting the ageing population and also easing the burden of the sandwiched generations simultaneously.

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12. References Allen, M. T. (1997). Measuring the Effects of “Adults Only” Age Restrictions on Condominium Prices. The Journal of Real Estate Research, 14, 339-346. Business Insider (2016) 11 scientific reasons you should be spending more time outside http://www.businessinsider.com/scientific-benefits-of-nature-outdoors-2016-4/?IR=T/#1improved-short-term-memory-1 Calma C. (2017). Senior Housing Highrise To Be Tallest Building in Ft. Lauderdale. Retrieved from https://seniorhousingnews.com/2017/10/08/senior-housing-highrise-tallest-building-ftlauderdale/

Cabinet Office Government of Japan. (2005). The Status of Aging in FY2005 and Implementation Status of Aging Society Measures. http://www8.cao.go.jp/kourei/whitepaper/w-2016/html/zenbun/index.html

Connolly, J. (2017). Continuing Care Retirement Communities Explained. Retrieved from https://www.agingcare.com/articles/defining-continuing-care-retirement-communities104569.htm

Chua, A. (2017). The Big Read: At Singapore’s last kampung, villagers cast a wary eye on the future. Retrieved from http://www.todayonline.com/singapore/big-read-singapores-lastkampong-villagers-cast-wary-eye-future

Faculin, K. (2017) Singapore in need of senior housing projects: report. Retrieved from https://www.propertyguru.com.sg/property-management-news/2017/10/163745/singapore-inneed-of-senior-housing-projects-report Guntermann, K. L. & Thomas, G. (2004). Loss of Age-Restricted Status and Property Values: Youngtown Arizona. The Journal of Real Estate Research, 26 (3), 255-275 Howstuffworks (2017) 10 Cutting-edge, Energy-efficient Building Materials https://home.howstuffworks.com/home-improvement/construction/green/10-cutting-edgebuilding-materials.htm Jaga Me. (2017). Is it acceptable to put your parents in a nursing home? Retrieved from https://www.jaga-me.com/parents-nursing-home/

Ki, T. S. (2016). Tech Disruption Comes to Real Estate Sector: Should Property Agents be Worried? Retrieved from http://www.channelnewsasia.com/news/business/tech-disruptioncomes-to-real-estate-sector-should-property-agen-7752052

Koh, G. and Yap, P. (2016). Would you want to grow old in today’s nursing homes? Retrieved from http://www.straitstimes.com/opinion/would-you-want-to-grow-old-in-todays-nursinghomes

Kallergis, K. (2017) Ocean Land unveils plans for $200M luxury senior living project in Fort Lauderdale. Retrieved from https://therealdeal.com/miami/2017/03/30/ocean-land-unveilsplans-for-200m-luxury-senior-living-project-in-fort-lauderdale/

Living Las Olas. (2017). Riverwalk Residences of Las Olas. Retrieved from http://livinglasolas.com/fort-lauderdale-condos/luxury-condos/riverwalk-residences-las-olas/ Lien Foundation. (2016, October 18). Survey Reveals Singaporeans’ Concerns and Aspirations of ... Retrieved October 4, 2017, from http://www.lienfoundation.org/sites/default/files/Media%20Release%20-%20Survey%20Reve als%20Singaporeans%E2%80%99%20Concerns%20and%20Aspirations%20of%20Aged% 20Care.pdf Luxury Insider (2012) World's First Hermès Apartment: The Marq On Paterson Hill http://www.luxury-insider.com/luxury-news/2012/05/worlds-first-hermes-apartment-the-marqon-paterson-hill Ming, T,E. (2016). Singaporeans looking to assisted living for old age: Survey. Retrieved from http://www.todayonline.com/singapore/assisted-living-facilities-retirement-villages-growingpopular-among-sporeans-survey Mathews, M. & Straughan, P.T. (2014) Results From The Perception and Attitudes Towards Ageing and Seniors Survey. Retrieved from http://lkyspp2.nus.edu.sg/ips/wpcontent/uploads/sites/2/2014/10/wp22_1510151.pdf Ministry of Manpower. (2017). Labour Market Statistical Information. Retrieved from http://stats.mom.gov.sg/Pages/Income-Summary-Table.aspx Ministry of Health (MOH). (2006). Demographic Realities: Opportunities and Challenges. Retrieved 14 August 2017, from https://www.moh.gov.sg/content/dam/moh_web/Publications/Reports/2006/3/Chapter%201 %20-%20Demographic%20Realities.pdf

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NParks. (2016). Community Bloom Initiatives. https://www.nparks.gov.sg/gardening/community-in-bloom-initiative

Retrieved

from

Personal Data Protection Act (PDPA) 2012, PDPC Legislations and Guidelines. Retrieved from https://www.pdpc.gov.sg/legislation-and-guidelines Population.sg (2016) Older Singaporeans to double by 2030. https://www.population.sg/articles/older-singaporeans-to-double-by-2030

Retrieved

from

Remember Singapore. (2012). From Villages to Flats (Part 1)- The Kampong Days. Retrieved from https://remembersingapore.org/2012/04/04/from-villages-to-flats-part-1/

Regan, T. (2017). In the Pipeline: Senior Housing Construction Projects. Retrieved from https://seniorhousingnews.com/2017/10/05/pipeline-senior-housing-constructionprojects-10517/ Sunset Homes (2016) The Importance of Using Quality Building Materials http://sunsethomes.ca/blog/9-sunset-homes-blog/12-the-importance-of-using-qualitybuilding-materials.html The Long and Winding Road. (2011). The Last Memories of the Rural Singapore of Old. Retrieved from https://thelongnwindingroad.wordpress.com/tag/last-kampung-on-mainlandsingapore/

Today. (2015). Smartphone Penetration in Singapore the Highest Globally: Survey. Retrieved from http://www.todayonline.com/singapore/smartphone-penetration-singapore-highestglobally-survey

Wagner, F., & Caves, R. (2012). Community Livability: Issues and Approaches to Sustaining the Well-Being of People and Communities. Retrieved from https://books.google.com.sg/books?id=rv_IBQAAQBAJ&pg=PT17&dq=livability&hl=en&sa= X&redir_esc=y#v=onepage&q=livability&f=false Wu, W. N. & Chow, Y. L. (2017). The Silver Housing Challenge. The Institute of Real Estate Studies and National University of Singapore. Ying, F. J. (2017, April 16). Market for elderly on-demand home care thriving. Retrieved October 16, 2017, from http://www.tnp.sg/news/singapore/market-elderly-demand-homecare-thriving

Appendix Appendix A Additional Demographic Analysis Ageing Population When we research the ageing population in Singapore, according to the population tends report (2017), the ageing population is growing. The median age of the resident population continued to rise, from 40.0 years as at end-June 2016 to 40.5 years as at end-June 2017 (Chart 2.1). Residents aged 65 years and over made up 13.0% of the resident population in 2017, compared to 12.4% in 2016.

Chart 2.1 Age Distribution of Residential Population Source: Population Trend 2017 in Singapore Moreover, As seen in the population pyramid in Chart 2.2, it shows that the ageing population has seen a tremendous growth while there has been a fall in the population growth due to fall in fertility rates, lower marriage rates and changing mind-sets amongst the younger population.

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Chart 29: age pyramid of resident population With the projected doubling of the elderly population, as well as improved life expectancy and improved medical treatment, it is inevitable that the figures are likely to increase. Profile Sex composition The proportion of the male elderly population to that of the females is 45%, which is 832 as of 2017, and can be illustrated as seen in the chart below.

http://www.tablebuilder.singstat.gov.sg/publicfacing/resetTable.action

Resident old-age support ratio

The number of working adults to support the growing ageing population is of concern. As the latter increases in number over the years, coupled with falling birth rates and population growth, there is an increased pressure on the smaller pool of working labour. As seen in the figure 30 below, there has been a steady fall in the resident old-age support ratio since the 1970s.

Figure 30: Population Trends, 2017 â&#x20AC;&#x201C; Resident Old-Age Support Ratio Dwelling The dwelling type of the aged has also been changing over the years, with a decline seen in the 3 Generation aged households. Aside from this dwelling composition, many aged also live in nursing homes and institutional care facilities, putting pressure on the need for such long term care beds.

Figure 31: Aged Residents Households by Household Structure 2000-2014 Income level

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A recent survey by Lien Foundation and NTUC income showed that nearly 50 percent of the respondents (Lien Foundation, 2016) are willing to live in such assisted-living facilities as well as were willing and able to spend approximately S$1380 to S$1740 a month. When it came to financing their silver aspirations, two in three of those below 60 years old were found to be actively saving for their retirement, with savings and investments being the most common options. Among seniors aged 60 and 75 years old, the top three financing options were savings (57%), salary (45%) and relying on financial support from their children (40%).

Figure 32: Ministry of Manpower â&#x20AC;&#x201C; Labour force in Singapore 2016 (Released on 26 January 2017)

Older estates, especially HDB flats generally have larger older populations as the baby boom population were the first to buy and move into the new towns. As seen in Figure_, it is found that residents aged 65 years and above were highest in concentration in Outram and Rocher. It is approximated that 1 in 5 residents of the total population in these planning areas make up the elderly population. 47

Appendix B Technology device and personal service Device _ description

picture

BeClose: BeClose helps seniors, families and caregivers stay in touch. Using discreet wireless sensors placed in the home, BeClose is able to track an elderly's daily routine. Caregivers are able to check on them at any time using a private, secure web page. If there are any disruptions, remote caregivers will be alerted by phone, email or text message. The system is extremely simple to set up due to the fact that everything is wireless. It requires the use to plug in the base station and place the battery operated sensors around the home. TV Ears TV Ears helps people with hearing loss hear the television clearly without turning up the volume. With TV Ears technology, users can set their own headset volume and tone while others around them set the television volume to their preferred level. The 3.0 system works with most TVs and covers up to 600 sq. ft. TV Ears headsets feature the patented Comply Foam TV Ears Tips. Each TV Ears Tip provides an acoustically sealed chamber within the ear that reduces room noise and provides comfort, cleanliness and clarity for outstanding word discrimination so that television dialog is clear and understandable. The TV Ears 3.0 wireless headset weighs only 1.6 oz. and is designed to rest under the chin so it stays in place when the user is lying down. This technology would give maximum comfort and entertainment for the elderly who are hearing-impaired.

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GreatCall Responder GreatCall Responder is a wireless, mobile PERS device that is an easy, convenient and affordable way to protect one’s self or one’s family members, at home or on the go. By pressing the button on the Responder, users are immediately connected to highly-trained certified response agents who will identify them and their location, conference in family or friends, dispatch 911 emergency services, access a nurse or provide any additional assistance, if needed. Consumers can also use the device to contact 911 directly. No matter the situation—the elderly walking home alone at night, feeling unsafe in any situation or living independently and wanting some extra security—they can then feel empowered knowing that assistance is provided 24 hours a day, seven days a week, and ready to respond.

Appendix C The Method of Pricing In our project, all entrants are required to be healthy, as this is the retirement village for active seniors. However, all people will get old and may require assistance service in future. In case for changing condition of their health, residents in this village can choose additional care service in response to their need. Generally speaking, there are two ways of pricing. One way is to pay equally regardless of service, and the other is to pay differently based on the service usage. This table below shows three different ways of pricing of CCRC projects in U.S. (Note: CCRC projects in U.S provide different types of living rooms, while this project provides same living room and introduce additional service when it is needed.) Type

Type A

Type B

Type C

Nick name

Lifelong Care

Amendment

Fee for Service

Initial Cost

$160,00-$600,000

$80,000-$750,000

$100,000-$500,000

Independent Living

$2,500-$5,400

$15,00-$2,500

$1,300-$43,00

Assisted Living

$2,500-$5,400

$1,500-$2,500 (*)

$3,700-$5800

Nursing Care

$2,500-$5,400

$1,500-$2,500 (*)

$8,100-$10,000

(*) After few months, residents are require to pay additional fee

Source: http://www.kyorin-u.ac.jp/univ/society/area2/labo/pdf/h26ccrc_18.pdf

In Type A, residents who live in "independent living" (no need nursing) and residents who live in "assisted living" pay equal monthly fee. Residents feel secure about payments in future, as monthly fee is same regardless of their health condition. Instead, common monthly payment is higher than other types. In Type C, on the contrary, residents who live in assisted living pay higher fee than independent residents. Monthly payment is lower than Type A, however, residents bear their health risk, as they have to pay additional fee for nursing service. Type B is in the middle of both. Residents do not have to pay additional fee in first few months in nursing or assisted room, while they are required to pay for it after the trial months.

In our project, as the first retirement village in Singapore, Type A (i.e. all residents pay equal monthly fee) should be adopted. Constant payment method will be attractive for elderlies, as they can estimate the future payment and better manage their retirement budget. Moreover, this method is beneficial for developer side as well, in terms of speedy returning investment. 50

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As I mentioned above, monthly fee is higher in type A in return for securing additional costs. In other words, developer can receive high profit margin as long as many of residents are healthy. Considering that all residents are required to be healthy at the entry timing, type A will optimize developerâ&#x20AC;&#x2122;s profit at least in earlier years. As the demerit for this method, however, health risk is allocated to the owner. So, the owner should try to make their residents healthier as long as possible. Although this issue cannot be neglected, our retirement village will provide a lot of facilities and activities which can support healthy lives of residents.

Appendix D Summary of Fourth Avenue

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Appendix E Residual Method

Appendix F Discounted Cashflow Analysis

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Appendix G Discounted Cash Flow with NPV Premium

Appendix H

Figure_: Arcadis Singapore Construction Rates as of Q4 2016

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Appendix I Carpark Construction Cost Number of Residential Units

394

Number of Carpark Lots (Source: Langdon and Seah)

394

1 Carpark Lot Size

16.2 sqm

Total Carpark Size

6,382.80 sqm

Development Guidelines

20% reduction under Range based Car Parking Standards (RCPS)

Total Carpark Size (after reduction)

5,106.24 sqm

According to Development Guidelines, in view that the site is within 400m radius from Sixth Avenue MRT Station, the successful tenderer is required to apply to LTA to take up a 20% reduction under the RCPS for the residential component. Therefore, total carpark size after 20% reduction is 5,106.24 sqm.

Appendix J Direct Comparison Method 3 comparables were used to determine the price per unit sqm for Fourth Avenue, namely Sixth Avenue Ville, The Tessarina and Fifth Avenue Condominium. The table below shows the method and adjustments made.

Fourth Avenue

Property Details

Subject Land

Comparable 1

Comparable 2

Comparable 3

Fourth Avenue

Sixth Avenue Ville

The Tessarina

Fifth Avenue Condominium

Year of Completion

1999

2003

1998

Tenure

99-years

Freehold

Property Price Index (PPI)

137.6

105

PPI Change (%)

-65.60%

-56.60%

-32.60%

Land Area (sqm)

18,532

4,552

28,549

7,066

Gross Plot Ratio (GPR)

1.8

1.4

2.07

1.62

Maximum GFA (sqm)

33,358

6,373

59,096

11,447

Distance (with nearest MRT)

1-min walk from Sixth Avenue MRT Station

3-min walk from Sixth Avenue MRT Station

10-min walk from Sixth Avenue MRT Station

2-min walk from Sixth Avenue MRT Station

Height

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Units

445

443

Transaction Unit 1 ($psf)

$1,431.00

$1,245.00

$1,610.00

Transaction Unit 2 ($psf)

$1,296.00

$1,477.00

$1,604.13

Transaction Unit 3 ($psf)

$1,270.00

$1,191.00

$1,614.78

Average unit $psf

$1,332.33

$1,304.33

$1,609.64

Price per sqm

$15,403.28

$13,401.18

$17,330.04

Transaction Date

2017

Adjustment Factors

Date of Sales (PPI)

65.60%

56.60%

32.60%

Size (1% per 1000 sqm)

13.49%

-12.87%

10.96%

Location (1% per walking-minute to nearest MRT)

3.00%

10.00%

2.00%

Total Adjustment

82.09%

53.73%

45.56%

Adjusted Price per sqm per GFA

$28,048.21

$20,601.74

$25,224.82

Land Tenure Adjustment (based on Ballas Table)

$26,926.29

$19,777.67

$24,215.83

Estimated Value per sqm per GFA

$23,639.93 psm or $2,196.20 psf

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Appendix K Price Differential Analysis with Hilford Condominium against Regular Condominiums Hilford Condominium

Property Details

Subject Land

Comparable 1

Comparable 2

Comparable 3

Hilford

Meadow Lodge

Grand Chateau

Terrene

Year of Completion

2017

2005

1997

2014

Tenure

60-years

99-years

Freehold

999-years

Land Area (sqm)

10,171

6,026

3,711

14,892

Gross Plot Ratio (GPR)

1.4

1.99

1.40

Maximum GFA (sqm)

14,239

8,436

7,385

20,848

Distance (to Subject Site)

5-min

1-min

3-min

Transaction Unit 1 ($psf)

$1,231.20

$1,015.00

$889.00

$1,322.00

Transaction Unit 2 ($psf)

$1,243.70

$1,030.00

$936.00

$1,291.00

Transaction Unit 3 ($psf)

$1,183.79

$1,106.00

$974.00

$1,223.00

Average unit $psf

$13,127.38

$10,925.46

$9,569.20

$14,230.01

Average Price per sqm

$13,127.38

$10,925.46

$9,569.20

$14,230.01

Transaction Date

2017

Adjustment Factors

Size (1% per 1000 sqm)

2.90%

3.43%

-3.30%

Location (1% per walking-minute to nearest MRT)

5.00%

1.00%

3.00%

Total Adjustment

7.90%

4.43%

-0.30%

Adjusted Price per sqm per GFA

$11,788.74

$9,992.83

$13,186.67

Estimated Value per sqm per GFA

$9,722.52 psm or

Premium

+$11,989.41 or 8.67%

$903.24 psf

Appendix L Needs of the Elderly 62

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Based on a national survey done on 1500 seniors, including the elderly, aged 40 to 74, the results suggest that most of them are still interested in learning through various methods. The highest reason for learning is to keep their minds active, amongst a myriad of other reasons

Figure 33: Reasons for Leaning (Mean scores) Also, many feel more comfortable learning with their peers as well, forming a circle of positive influence to one another, as seen in Figure 33.

Figure 34: Learning Styles (Mean scores)

Most of them are interested in topics like personal health, followed by hobby and then personal growth, to the extent of taking up courses in past 12 months and next 12 months as shown in Figure 34.

Figure 35: Taking up courses in past 12 months and next 12 months

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Appendix M Control Plan

Appendix N Building Height Plan

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Appendix O Visual Control Plan

Personal Statement & Reflections Lim Shao Qian Lester I facilitated and gave suggestions to the group with regards to the initial idea of our development regarding this group project with respect to its theme, amenities, facilities and concepts. I also led the discussion regarding the choice of our target audience. With regards to the financial analysis of the project and the various methods of valuation like Direct Comparison, Residual valuation and DCF and bidding price for the subject site Danial and myself worked through the write up and the spreadsheets to arrive at our figures. The various assumptions made with regards to the DCF analysis and residual valuation as well as pricing strategies, development breakdown were carefully thought of by myself and Danial, Ping Yi and myself. Similarly, Danial and myself worked through the decision of the investment timeline and marketing strategy, the idea of selling the proposed development in phases as well as the derivation and justification of having a price premium (with respect to analyses done on The Hillford and its comparables) of our development was an analysis done by myself and Danial. The marketing and exit strategies of the proposal were also thought of and written by Danial and myself. The main challenge was the coordination of ideas of the group. Our group has three exchange students and it was an absolute pleasure working with them, to hear about their diverse ideas and how real estate in their country can be very different compared to Singapore. The challenge was to amalgamate the many different ideas from many different backgrounds and different school of thoughts from the different majors within the group.

Muhammad Danial Arun This project has been a challenge for me personally. Given that I led the entire group project throughout the entire 2 monthsâ&#x20AC;&#x2122; time and still managed to complete the project was truly a learning experience for me. Given the dynamics of the group, someone had to lead the team, so I stepped up to the plate. I contributed to the team by setting up physical and online meetings and when I realised that no progress is made given that there was one month left, I had to do most of the work alongside Lester and Daniel. I basically wrote more than 70% of the project, and I essentially wrote sections 4.3 all the way to the last section, section 11. I co-wrote those sections with Lester, with Ping Yi giving us valuable feedback and input. Although the rest of the team besides us three did what was asked of them (to do sections 1 to 4), we felt that the work done was not up to standard. As a result, we had to take a lot of time redoing it despite multiple feedbacks to them to improve their work. Thus, it has been a real challenge. In addition, having three exchange students was not easy because the language barrier and education background difference was too wide. Therefore, Lester and I essentially had to take charge. As the project is heavy on finance, only Lester and I were doing it because the exchange students do not know how to do the financial analysis, whilst the other local students are not well-versed in this field. Therefore, both of us had to write the entire section from Financial analysis, exit strategy, marketing strategy, risk analysis and concession from government.

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Hani Amalia Binte Adnan I was involved in various parts of the project at different junctures in the timeline of the project. I worked with Deepa on the target audience (section 3 of the report) – the chosen target group and also needs of the target group, using survey results of the elderly’s needs and wants. I did an extensive write up of each feature in Draft 2 of our report relating to the hardware (amenities) and software (service) of development (now reorganized into Sections 5 & 6 of the final report), to decide what amenities should be within the development. This involves coming up with the concept overview of the development, with the ‘kampong spirit’ initially being the overarching umbrella of the project. I wrote about the initial theme, elderly-friendly features, the soft aspects of service so as to cater to their physical, mental and social needs. However, the development Kampung Admiralty soon got publicity in the news, incorporating our ideas which is already manifested in reality. Hence, we changed our theme to keep the novel feature of our ideas. I then finalized Sections 5 & 6 (Development Concept and Proposed Development) of the final report with Danial and Ping Yi. I also did part of executive summary and wrote the whole of Stakeholders section (Section 10). It was a little challenging coordinating the big ideas together such as the concept. Everyone has their own ideas and vision of the development. Hence, without setting the team’s direction to settle on the overarching theme and concept, it was hard to decide on smaller details such as the sales strategy, the type of development to embark on and which amenities are necessary to include in our project. All-inall, I learnt that communication is the most important in this project. Although face to face meetings would be ideal, we had to make do with online meetings on Google Hangout a few times, since it was not possible for everyone to be present at each meeting.

Yuta Nasu Personal statement and reflection I feel it is somewhat difficult for foreigners to engage in real estate development project. As I am not familiar with laws, regulations, and development system in Singapore, I could not contribute to a part of total contents, such as site analysis for example. However, I think this module was great because it provides students with both classroom learning and practical working. Although this feature is not limited into RE3103 course, I think this education system is beneficial for students. I really envy them. My contribution Regarding to development concept, I took charge of case studies from Japan. Some of the design and amenities (for example, community garden for residents) of us reflect the cases of Japan. As for marketing strategy, I wrote chapter 10 & 11, which are “Risks to the Project” and “Mitigation to Risks”. Adding to this, I devised the pricing method, which is in Appendix. Challenges and reflections As it is the first retirement village development in Singapore, there is no precedent in Singapore. That I think makes this project work tough and challenging. However, I learnt a lot of things through examining foreign precedents, especially Japan and U.S. Now I found that governmental policies, including development approval or subsidies, have great effect on retirement village projects. Thus, I 69

feel I have to study policy-side as well, and acquire which kind of policy will enable ideal retirement villages to realize.

Huang Jingyin Personal statement/reflection As the exchange student, it is my first Real Estate course. My major is human geography so financing and marketing seem very challenge for me compare to NUS students. Although it is my first RE course and first RE project, I learn as many as I could as the project was completed. The project covered every aspect of real estate development that allowing me to an integrated concept of how to complete a project. Not only the project taught me what is real estate development, but also make me aware of how hard it is to become a good developer. We had to consider many different aspect in order to final decide which type of housing we developed. Known the market trend was not enough, we have to know culture, lifestyle, and laws. For international student, it could consider disadvantages because I were not familiar with Singaporeâ&#x20AC;&#x2122;s real estate market. If I knew more about Singaporeâ&#x20AC;&#x2122;s real estate market, I could provide more assistance. Contributions I provided the overall development concept to the group thought case study.

Hung Ping Yi I have very high anticipation on this project since my NUS exchange body share her astonishing project to me last year. I learned a lot from that when I did my final development project. However, this time, this report isn't going that way!! The reason is not only the content but the teamwork. Therefore, in this statement I will separate to this two part to explain my reflection, first is about the content and second will mention about the teamwork improvement. About the retirement housing market strategy, finally I was compromised with my teammates who think selling will more fix in Singapore's context. However, I still hard to ensure it will be proper for retirement housing although we set up the age restriction. Overview the following case, in japan, US and Taiwan, all of them always approach the long term leasehold program which will make the longterm profit and step in the game of retirement market. I concerned if we do both way and compare it will be better next time. Second, the teamwork, the problem will in two part, unfamiliar with RED process and group participation. As the exchange student, I wouldnâ&#x20AC;&#x2122;t be so aggressive to control whole idea. However, since I have done related project before, I know our team suffer lots of detour in the first few week and I really can't help. Furthermore, some member aren't really care about this project and lack of substantial contribution at first. In the end, some member and I decide the main concept first and ask other to follow, and that is how this report make up. In whole this process it lack of intensive discussion, that is a really terrible things. It all need to get better in next group project. 70

RE3103 Real Estate Development

lastly, I want to mention, there still some hardworking member who saves this project, I will especially thank for Danial, Laster who hold nearly half of the project; JingYing who help to revise many part at the end of few days; Deepa and Hani who revise and give many support; Yuta who give the great CCRC example. I have try my best to help and spent most of my weekend to it. However, due to the language barrier and some restriction. my contribution can't make a crucial improvement in whole project. Wish my teammate can forgive my useless. specific contributions       

Contribute the retirement resident development case in Taiwan (with detail key success parameter and detail excel sheet which the actual retirement calculation) Finish the Demographic trend (ch1) Finish case study in Taiwan (revised by Deepa) Finish Specification (ch6.3), including Site planning, all facility site, category and the service. Part of financial cost (most done by Danial) Revise ch1-cH7, make coherent to all report (with Jingying) Final beautified and revise whole the report (with Danial)

Challenges and reflections on key learning points 

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In one development, there is lots of parameters need to decide which include site, building type, marketing strategy. The start point is hard to decide for us this time. Therefore, we have hard time to decide the point. However, next time we should choose one concept and start repeat revise it. IRR and NPV should estimate at the first! we should think concept and the financial condition simultaneously. I should roughly calculate it before the discussion. (it is always hard aspect for me to comprehend to persuasive other in English) Our status should set up next time, if we can pretend we propose for any specific developer, it will easy for us to decide the market strategy. Moreover, it will be easy for us to tell our strength and make the decision. For instance, I have heard the Keppel has do some evaluation to judge in the retirement housing. That will be easy to decide or research the cooperation partner.