Pilot Private Assisted-Living Development At Parry Avenue
By ERA Research & Consultancy, The Commentary
Published 22 March 2023Download PDF Article
Introduction
The Singapore government offers a residential land parcel for sale for developers to build the first assisted living development.
The tender for the Government Land Sale (GLS) site at Parry Avenue closed on 21 March 2023. The development of the project will come with specific regulatory guard rails to ensure that the development will cater to elderly residents who need assistance with daily living activities.
Details of Parry Avenue Land Parcel
The development can be a residential non-landed building of up to 5 storeys or a combination of apartments and landed houses.
The details for the site is shown in the table below.
According to the regulations, at least 60% of the maximum permissable Gross Floor Area (GFA) shall be for assisted living use including individual assisted living units and communal spaces.
In addition, at least 20% of the maximum permissible GFA shall be for Health and Medical Care (H&MC) use, which includes the mandatory provision of at least 100 nursing home beds.
Why Such Developments Are Needed In Singapore
Recently, the government has been driving initiatives for senior care to better support our silver generation. An example would be the launch of public assisted living flats also known as Community Care Apartments (CCA) in Bukit Batok in February 2021. A second and third CCA projects will be located at Queensway and Bedok respectively.
The site at Parry Avenue follows a similar concept to the CCA in Bukit Batok, albeit it being a private development rather than a public one.
The growing focus on assisted living developments came on the back of Singapore’s aging population whereby around one in four Singaporeans will be aged 65 years and older by 2030. The declining trajectory of the Singapore residents’ fertility rate and population growth may indicate a potential socio-economic shift in the property market.
A rapidly ageing population will lead to an increasing pool of homeowners who will benefit from medical assistance and facilities located near their homes or families. With advancement in our healthcare systems and technology, seniors are able to age gracefully and may steer away from nursing homes due to a preference shift for a less medicalised environment.
Hence, the key purpose of a pilot private assisted living (AL) development at Parry Avenue is to create a community of seniors to encourage autonomous living and to foster a collaborative mindset among residents. The difference between an AL development to that of a private condominium would be the immediate availability of medical attention as and when required.
During their stay at the AL facility, the residents are able to include a range of services from meal preparation to regular health screenings within their place of residence. This takes on a less medicalised approach than a nursing home but also provides a more holistic array of senior services than that of a private condominium.
Singaporeans buying more primary market properties, especially in the CCR.
Local property buyers, both Singaporeans and Singapore permanent residents (SPR), were more active and purchased more private homes in the primary market last month, compared to January 2023.
The increase in the number of private housing units sold last month was mainly driven by local buyers. About 71.6% of the private housing units sold by developers islandwide were acquired by Singaporeans, a rise from the 70.2% in January 2023. Similarly, 15.8% of the primary market private housing units were bought by SPR, 0.8 percentage points higher than the 15% in the preceding month.
After hitting the peak of 21.7% of the private homes sold in the primary market last December, the proportion of new private residential properties bought by non-permanent resident (non-PR) foreigners slipped to 12.6% in February 2023.
The increase in the number of CCR units sold coupled with a higher participation rate from Singaporean buyers meant that more Singaporeans purchased private homes in the prime districts in February 2023.
As shown in Table 2, Singaporean buyers bought about two-third of the CCR housing units sold by developers last month, an increase over the 56.2% of the units transacted in the CCR primary market in January 2023.
Neccessary Regulations and Restrictions
As the Parry Avenue site is a pilot project for future AL developments, the authorities were mindful to interject necessary guardrails for the development to prevent developers from building a typic condominium for strata-unit sales and risk compromising the essence of this project.
First, the authorities established a minimum age for the residents in this development. The key criteria would be that interested applicants must be aged 65 years and above, to ensure that the development is used by seniors.
Second, the residents must sign a lease with a minimum duration of three months. This measure prevents the operator from leasing the premises as a short-term stay, equivalent to that of a hotel or serviced apartment.
Third. the subdivision of land and strata area is disallowed. Residents would not be able to purchase any strata units in this development. Instead, the residents would only be able to rent the units in this facility, including long term leases of several years.
Tender procedure
The tender for the Parry Avenue site is conducted under the Concept & Price Revenue model, where the authorities will evaluate the tender submissions, to ensure that the selected concept proposal is aligned with the vision for the private assisted living development.
According to the URA, the bidders “are required to submit their concept proposals and tender prices separately. The concept proposals will first be evaluated against a set of criteria specified in the tender, which includes suitability and innovativeness of the proposed model of care, as well as quality of the proposed care programmes and services. Only concept proposals that are shortlisted will proceed to the second stage of evaluation, which will be based on price only. The site will then be awarded to the tenderer with the highest bid price among the shortlisted concept proposals.”
The tender attracted four bids from three different group of bidders. The three groups of bidders are shown in the table below.
Comparable of Residential Rental
The list of comparable rental properties includes condominiums located within a kilometer from the subject site. Based on a typical unit with floor area od 40 sqm, the median rental rate ranged from approximately $41 to $57 per square meter (psm) monthly. This indicates that the monthly rental quantum for a 40 sqm unit in District 19 could range from $1,642 to $2,298.
Potential Catchment of Clientele
The Parry Avenue development is surrounded by a large residential landed housing estate located between Yio Chu Kand Road and Upper Serangoon Road. The subject property is also near to Serangoon Garden, another landed housing estate. They are relatively low-density housing areas where the traffic and noise level is relatively lower than areas with higher population density.
Based on our research, a landed property located 400m away from the site was sold at $13,300,000, marking it as the highest resale transaction in the area from January 2022 to March 2023.
Some of these landed developments located in the area, such as Parry Park and Parry Ville were constructed in the early 1990s. Hence, we deduce that there may be a growing proportion of senior occupiers in the area.
These elderly owners could be “empty nesters” when their adult children move out to their own homes. When necessary, these seniors could move to the private assisted living development at Parry Avenue. At the same time, they could opt to sell or rent out their existing properties to fund their retirement needs, and potentially contribute to the future demand for the new private AL development at Parry Avenue.
Conclusion
This Assisted Living facility is not purely a real estate play, but a healthcare play. The real estate is the hardware. But the software, such as the healthcare and elder-care services are equally, if not more important. It is the software that is the key to the success of this development.
Introduction
The Singapore government offers a residential land parcel for sale for developers to build the first assisted living development.
The tender for the Government Land Sale (GLS) site at Parry Avenue closed on 21 March 2023. The development of the project will come with specific regulatory guard rails to ensure that the development will cater to elderly residents who need assistance with daily living activities.
Details of Parry Avenue Land Parcel
The development can be a residential non-landed building of up to 5 storeys or a combination of apartments and landed houses.
The details for the site is shown in the table below.
According to the regulations, at least 60% of the maximum permissable Gross Floor Area (GFA) shall be for assisted living use including individual assisted living units and communal spaces.
In addition, at least 20% of the maximum permissible GFA shall be for Health and Medical Care (H&MC) use, which includes the mandatory provision of at least 100 nursing home beds.
Why Such Developments Are Needed In Singapore
Recently, the government has been driving initiatives for senior care to better support our silver generation. An example would be the launch of public assisted living flats also known as Community Care Apartments (CCA) in Bukit Batok in February 2021. A second and third CCA projects will be located at Queensway and Bedok respectively.
The site at Parry Avenue follows a similar concept to the CCA in Bukit Batok, albeit it being a private development rather than a public one.
The growing focus on assisted living developments came on the back of Singapore’s aging population whereby around one in four Singaporeans will be aged 65 years and older by 2030. The declining trajectory of the Singapore residents’ fertility rate and population growth may indicate a potential socio-economic shift in the property market.
A rapidly ageing population will lead to an increasing pool of homeowners who will benefit from medical assistance and facilities located near their homes or families. With advancement in our healthcare systems and technology, seniors are able to age gracefully and may steer away from nursing homes due to a preference shift for a less medicalised environment.
Hence, the key purpose of a pilot private assisted living (AL) development at Parry Avenue is to create a community of seniors to encourage autonomous living and to foster a collaborative mindset among residents. The difference between an AL development to that of a private condominium would be the immediate availability of medical attention as and when required.
During their stay at the AL facility, the residents are able to include a range of services from meal preparation to regular health screenings within their place of residence. This takes on a less medicalised approach than a nursing home but also provides a more holistic array of senior services than that of a private condominium.
Singaporeans buying more primary market properties, especially in the CCR.
Local property buyers, both Singaporeans and Singapore permanent residents (SPR), were more active and purchased more private homes in the primary market last month, compared to January 2023.
The increase in the number of private housing units sold last month was mainly driven by local buyers. About 71.6% of the private housing units sold by developers islandwide were acquired by Singaporeans, a rise from the 70.2% in January 2023. Similarly, 15.8% of the primary market private housing units were bought by SPR, 0.8 percentage points higher than the 15% in the preceding month.
After hitting the peak of 21.7% of the private homes sold in the primary market last December, the proportion of new private residential properties bought by non-permanent resident (non-PR) foreigners slipped to 12.6% in February 2023.
The increase in the number of CCR units sold coupled with a higher participation rate from Singaporean buyers meant that more Singaporeans purchased private homes in the prime districts in February 2023.
As shown in Table 2, Singaporean buyers bought about two-third of the CCR housing units sold by developers last month, an increase over the 56.2% of the units transacted in the CCR primary market in January 2023.
Neccessary Regulations and Restrictions
As the Parry Avenue site is a pilot project for future AL developments, the authorities were mindful to interject necessary guardrails for the development to prevent developers from building a typic condominium for strata-unit sales and risk compromising the essence of this project.
First, the authorities established a minimum age for the residents in this development. The key criteria would be that interested applicants must be aged 65 years and above, to ensure that the development is used by seniors.
Second, the residents must sign a lease with a minimum duration of three months. This measure prevents the operator from leasing the premises as a short-term stay, equivalent to that of a hotel or serviced apartment.
Third. the subdivision of land and strata area is disallowed. Residents would not be able to purchase any strata units in this development. Instead, the residents would only be able to rent the units in this facility, including long term leases of several years.
Tender procedure
The tender for the Parry Avenue site is conducted under the Concept & Price Revenue model, where the authorities will evaluate the tender submissions, to ensure that the selected concept proposal is aligned with the vision for the private assisted living development.
According to the URA, the bidders “are required to submit their concept proposals and tender prices separately. The concept proposals will first be evaluated against a set of criteria specified in the tender, which includes suitability and innovativeness of the proposed model of care, as well as quality of the proposed care programmes and services. Only concept proposals that are shortlisted will proceed to the second stage of evaluation, which will be based on price only. The site will then be awarded to the tenderer with the highest bid price among the shortlisted concept proposals.”
The tender attracted four bids from three different group of bidders. The three groups of bidders are shown in the table below.
Comparable of Residential Rental
The list of comparable rental properties includes condominiums located within a kilometer from the subject site. Based on a typical unit with floor area od 40 sqm, the median rental rate ranged from approximately $41 to $57 per square meter (psm) monthly. This indicates that the monthly rental quantum for a 40 sqm unit in District 19 could range from $1,642 to $2,298.
Potential Catchment of Clientele
The Parry Avenue development is surrounded by a large residential landed housing estate located between Yio Chu Kand Road and Upper Serangoon Road. The subject property is also near to Serangoon Garden, another landed housing estate. They are relatively low-density housing areas where the traffic and noise level is relatively lower than areas with higher population density.
Based on our research, a landed property located 400m away from the site was sold at $13,300,000, marking it as the highest resale transaction in the area from January 2022 to March 2023.
Some of these landed developments located in the area, such as Parry Park and Parry Ville were constructed in the early 1990s. Hence, we deduce that there may be a growing proportion of senior occupiers in the area.
These elderly owners could be “empty nesters” when their adult children move out to their own homes. When necessary, these seniors could move to the private assisted living development at Parry Avenue. At the same time, they could opt to sell or rent out their existing properties to fund their retirement needs, and potentially contribute to the future demand for the new private AL development at Parry Avenue.
Conclusion
This Assisted Living facility is not purely a real estate play, but a healthcare play. The real estate is the hardware. But the software, such as the healthcare and elder-care services are equally, if not more important. It is the software that is the key to the success of this development.
Written By ERA Research & Consultancy
ERA Singapore
T: (65) 6249 3172
W: rnc@era.com.sg
Disclaimer as attached in PDF for download.