How will Sky Habitat and Katong Regency fare at launch?

Both residential projects should do relatively well due to their MRT proximity and investment appeal, says DBS.

CapitaLand's Sky Habitat and UOL's Katong Regency will begin their marketing blitz over the next two weeks, and both are conveniently within walking distance to MRT stations. The persistent demand for investment purchases should also help drive up interest for the two projects.

Here's more from DBS:

Two upcoming launches. In the next two weeks, two new projects - Capitaland’s Sky Habitat and UOL’s Katong Regency - are expected to be marketed. Pre-marketing for both has started and indicative interest is relatively decent. Designed by Moshe Safdie and located just a short walk away from the Bishan MRT station and Junction 8, Sky Habitat comprises 509 units, of which 42% are 1 and 2 bedroom units of 635-1,453sf (incl PES) while 43% are 3 bedders from 1,216sf each.

Official soft launch and opening of showflat is expected to be in the coming week and premarketing interest has been decent so far. UOL’s Katong Regency, a mixed residential/retail development at the former Lion City Hotel site is expected to be soft launched in the next 2 weeks. The residential component comprises 244 units with 59% consisting of 1-bedroom units and 24% 2-bedders, ranging from 549-1,238sf. Given the convenience of the location 5 mins from MRT station and lack of supply of such products in the vicinity, we expect investment take up to be strong for this project.

Investment appetite holds sway. Our recent round of showflat visits showed that take up of new units continues to be relatively robust. At MCL Land’s Ripple Bay in Pasir Ris, take up headed higher into the second week of launch, albeit at a slower pace, to 60% compared to 50% a week ago. While investment demand continued to be robust, there was a segment of owner-occupation appetite for larger units. Ripple Bay comprises 679 units, of which 60% are 1-2 bedders and 26% are 3 bedders. Located adjacent to Far East’s Seastrand, this is the second new private residential development in the area with another, Watercolours, an EC project developed by GPS Alliance being pre-marketed currently.

Strong investment demand, policy overhang persists. Investment appetite for physical property continues to be relatively robust, thanks to the current low interest rate environment. However, upside pricing momentum has decelerated with the latest URA 1Q12 flash estimate starting to show a slight retracement. We believe as volume demand continues to be strong, with Jan and Feb primary sales reaching 4200 units, policy risk has heightened. We continue to prefer stocks with less residential exposure. Our top picks are CMA and UOL and we recommend buy on weakness for Capitaland and GLP.