Luxury at a Premium: Is The Orie Singapore's Most Overpriced Condo or the Ultimate Urban Investment?

If you're an observer of Singapore's property market, you'll have noticed the ongoing preview of The Orie, a luxury condominium in the heart of Toa Payoh, developed by CDL, Frasers Property, and Sekisui House. This development is set to redefine urban living with its smart home features and strategic location, just a 5-minute walk from Braddell MRT. The Orie comprises two 40-storey towers, housing 777 residential units.

There's little to criticize about The Orie, given its prime location, luxurious amenities, and modern design. However, the undeniable elephant in the room is its pricing. The developers secured the land at a record-breaking S$1,360 per square foot per plot ratio (psf ppr), significantly outbidding the second-highest offer at S$1,153 psf ppr, with an 18% difference. This high land acquisition cost naturally translates into the condo's elevated price point, setting expectations for a premium investment in one of Singapore's mature estates.

Bidding Entries	Tendered Sale Price	$PSF PPR
City Developments Ltd; Frasers Property; Sekisui House	$968,000,000	$1,360
Capitaland	$819,999,999	$1,153
GuocoLand; Hong Leong Holdings; JV between Hong Leong Group and Mitsui Fudoson	$775,781,823	$1,090

Did the developers of The Orie overpay for the land? Unlikely, as CDL, Frasers Property, and Sekisui House are seasoned developers with a deep understanding of the real estate market. Their bid would have been supported by extensive analysis, ensuring profitability.

The rationale behind their bid likely considers the current market conditions where nearby competitors are transacting at significant price points. Here are the latest transactions for 3-bedroom units in developments near surrounding MRT stations:

Resale Projects	PSF	Size	Quantum
Woodleigh Residences	$2,589	958	$2,480,262
Park Colonial	$1,066	2308	$2,460,328
Sky Vue	$2,505	1141	$2,858,205
Jadescape	$2,372	1012	$2,400,464

Tier 1 resale condominiums are transacting at over $2.4M, with a Sky Vue unit reaching more than $2.8M. If we consider the Sky Vue transaction as an outlier and add a slight premium for a new launch, it wouldn't be unreasonable for The Orie to sell at around $2.6M for a 3-bedroom unit, aligning closely with the expected launch price.

Now, let's look at the closest competitors in the Toa Payoh area. Gem Residences and Trevista, completed in 2019 and 2011, respectively, are currently transacting at just under $2,000 PSF. This discrepancy might raise concerns, as The Orie could be approximately $600 PSF pricier.

Resale Projects	PSF	Difference
The Orie	$2,500 (estimate)
Gem Residences	$1,924 (average from Nov – Dec 24)	$576
Trevista	$1,916 (average from Nov – Dec 24)	$584

However, The Orie has some advantages. Firstly, it benefits from GFA harmonization, meaning no non-functional space like air conditioner ledges is included in the saleable area. This results in a slightly smaller unit size with no reduction in living space, thereby increasing the price per square foot. Additionally, being a brand new development, it offers a fresh 99-year lease, significantly younger than its counterparts.

Despite these advantages, the total cost for units at The Orie will still be notably higher than Gem Residences and Trevista. Whether the market will accept this premium remains to be seen.

Considering these aspects, The Orie stands out as an attractive choice for those seeking a home, thanks to its prime location, prestigious developer collaboration, and high-end finishes. For investment purposes, more in-depth analysis on the exit potential and strategy would be advisable due to the exit pricing encroaching into the territory of traditionally recognized higher-tier asset classes.