Roxy-Pacific Holdings shrugs off URA shoebox rules

Over 40% of their units are under 50sqm.

According to OCBC, the URA recently enacted caps on the number of units, based on an average size of 70 sqm GFA, in non-landed private housing projects outside the Central Area. This is similar to a previous restriction last November for areas with 1.4 plot-ratios.

Here's more from OCBC:

In addition, a rule on the maximum number of homes based on a 100 sqm average, originally for the Telok Kurau estate, was extended to Kovan and Joo Chiat/Jalan Euno.

From our discussion with management, we understand that these measures were not surprising. Of their recent five acquisitions, two projects – Sophia Mansion and Wilkie Terrace – are located in the central area and are not subject to the new measures. The remaining three sites were already subjected to the previous 70 sqm rule and would not be incrementally affected.

Management also indicated they have received provisional permission (PP) for the bigger sites, Jade and Westvale, with more than 40% of the units sized under 50 sqm, and expect Harbourview to be designed along similar lines.

We believe that demand for shoebox units remain buoyant, given still ample liquidity, and existing shoebox projects could well benefit from a lower supply of small units ahead. This being so, existing ROXY projects, such as Natura@Hillview and Nottinghill, could benefit though we note sales at both projects are already approaching 90%