Is The Venue Residences A Good Buy?

Recently I’ve received an email from one of my readers to do a review on The Venue Residences.

Apparently, they are looking to invest in a city-fringe property and had shortlisted it as one of the projects to consider.

However, since the showflat for this project has been removed, they don’t have much information as to how the project is going to be like.

And that’s why I’ve decided to do this in-depth review on The Venue Residences to help buyers who are also considering buying this project as well.

So… Let’s get started shall we?

You might also like: Check out how I use the Magnifying Stack Method to evaluate new launches with great investment potential.

Price Comparison With The Neighbours

Firstly, let’s look at the prices of surrounding projects to determine if it is worth our while to invest in The Venue Residences.

In this case, the two most comparable condominiums in terms of location and age are:

* Sennett Residence
* Sant Ritz

Sennett Residence Transactions

Sant Ritz Transactions

The Venue Residences Transactions

From the charts above you can tell that Sennett Residence and Sant Ritz are quite similarly priced with an average of $1466 psf.

On the other hand, The Venue Residences is priced lower with an average of just $1404 psf.

However, here are some interesting facts.

As of July 2015…

Out of the total 335 units in Sennett Residence, 267 (80%) were sold.

As for Sant Ritz, 157 out of 215 units (73%) were transacted.

And out of these 3 condominiums, The Venue Residences fared the worst with just 78 units transacted out of the total of 266 (29%)!

Now… At first glance, it might seem to go against reason that despite being the lower-priced option, sales for The Venue Residences have performed relatively worse than its counterparts since it was launched in 2013.

But a closer look at its location reveals clues as to why it is so…

Location

As always, location is the number one factor for any prudent investor to even consider placing their hard-earned cash into a property.

In the case of The Venue Residences, here are my findings.

The Venue Residences Map

Close Proximity To Workplaces… BUT…

As one of the factors that determine demand, nearby workplaces are highly important.

If you look at the map of the area, you will see that there is a cluster of light and heavy industrial zoned areas to the South-East of The Venue Residences.

Judging from the relatively small size of that cluster, and the number of available housing options like The Sennett Residences, Sant Ritz and even Woodsville 28, which are surrounding the project, there seems to be too much competition for tenants who are working nearby.

Therefore, my take is that this cluster of nearby workplaces will have a very minimal impact on the demand for The Venue Residences.

However, this brings me to my next point.

Very Close To Potong Pasir MRT

Whilst MRT stations are not really high up on my “to look out for” list, this happens to be the saving grace for The Venue Residences.

The advantage of being close to Potong Pasir MRT station is that residents and tenants get to enjoy a very short commute to the Central Business District (CBD) of Singapore.

4 stations away from Dhoby Ghaut MRT and 5, 6 stations away from City Hall MRT & Raffles Place MRT respectively, makes transport a breeze for those working in the CBD.

If you happen to be staying in this project in the future, you can expect to reach your workplace in around 20 minutes or so from Potong Pasir MRT station.

And that itself is a huge plus point for The Venue Residences in terms of demand.

Established Road Networks Leading To The CBD

Apart from the PIE & CTE which are located very close-by, Serangoon Road provides a quick and direct route to the city centre.

Thanks to the completed Woodsville Flyover, the traffic congestion that plagued this road for many years have eased tremendously since its implementation.

However, do try to only select units that are NOT facing the Pan-Island Expressway because of the constant traffic noise and dust that it generates.

Quite frankly, this is one of the main reasons why units have not been selling so well as many units in this project are facing either a noisy road or expressway.

*Experienced buyers and investors are quick to pick up on such clues and would know that this makes it extremely challenging to sell or rent the unit in future.

Amenities

In terms of amenities nearby, residents of The Venue Residences will get to enjoy a wide range of eateries and food centres nearby and of course be in close proximity to Saint Andrews School if they have school-going children.

Since it is a mixed development, its first level will consist of restaurants, F&B outlets and shops to cater to the residents.

Despite that, it is still lacking in a nearby big-scale supermarket where residents can get to shop for groceries at their convenience without having to drive.

Unit Layout

Being an experienced developer, CDL sure knows how to maximize the space of its units.

Below is an example of one of its 2 bedroom suites unit floor plans.

The Venue Residences 2 Bedroom Suites

From this layout you can tell that the room sizes are very generous as compared to many other recent new launches.

Bedroom 2 (The common room) is just slightly smaller than the Master Bedroom which is large enough to even fit a King-sized bed AND a dresser in front of the bed.

Generally, the layouts of units in this development maximize the important spaces such as the bedroom and living room to make it a comfortable home for both buyers and tenants.

But despite the close proximity to the MRT and good layouts…

There is one last question we have to answer.

Is It A Safe Investment?

To determine if the investment is viable… It always pays to ensure that your potential cashflow is in surplus if you were to rent it out.

Since it is still under construction, I will be using the rental data from Woodsville 28 which is in a similar location to The Venue Residences. According to SRX, a 904 sq ft 2 bedroom unit at Woodsville 28 is currently renting for an average of $3000.

So here’s a worked example of a currently available unit at The Venue Residences. (as of 30/07/2015)

Unit type 2 Bedroom Suite
Price $1'218'360
Size 840 sq ft
Downpayment $243'672
Monthly Mortgage $3'364
Maintenance Fees $300 (est.)
Expected Rental $3'000
Monthly Cash Flow -$664

*Assuming purchaser has no existing property ownership and eligible for 80% loan at 1.5% for 30 years

From the above calculations you will be able to see that the rental prices for this project is not high enough to cover for the monthly mortgage payments and the monthly maintenance.

That creates a huge problem for investors as they would have to fork out cash from their own pockets to service the loan each month.

On top of that, its neighbours, Sennett Residence and Sant Ritz will be obtaining their TOP at around the same time as The Venue Residences. Making it even harder to source for a tenant because of all the extra competition in the market.

The Verdict?

If you are looking to purchase this property for your own stay to enjoy the close proximity to the CBD and enjoy the good unit layout, then it might be a good option to consider.

However, if you are intending to purchase it for investment, then I would strongly advise against it because of the difficulty to get tenants to pay a high enough rental to cover your monthly expenses.

Now It’s Your Turn

Did you agree or disagree with this review?

Leave a comment below to let me know what you think!

I look forward to hearing from each and every one of you.