Out of the top 50 property searches on The Edge Property website, apartment and condominium projects in the Geylang area were among the most sought after. While Geylang may be famous for its red-light district and eateries such as those selling beef hor fun and frog porridge on Lorong 17, and 126 Dim Sum or Wan Dou Sek on Sims Avenue, it is also a popular residential area for those who want reasonably priced freehold apartments near the CBD and the upcoming Paya Lebar Central commercial hub, according to Alan Cheong, head of research for Savills Singapore.
“Buyers of residential units there are typically Singaporeans and permanent residents,” he notes. Tenants, on the other hand, tend to be foreigners who like the area’s proximity to the city and amenities, and relatively affordable rents. “Geylang has a unique character, with its vibrant nightlife, which you can’t find elsewhere in Singapore,” comments Cheong. Geylang is on the city fringe and is therefore considered to be in the Rest of Central Region (RCR). The most-searched condos are mainly older projects, such as the 218-unit freehold Wing Fong Mansions on Lorong 14, which was completed in 1997; the 338-unit freehold The Sunny Spring on Lorong 40, which obtained its Temporary Occupation Permit in 1998; and the 142-unit freehold The Atrium Residences on Lorong 28, which was completed eight years ago.
Wing Fong Mansions has been on investors’ radar because of its affordability and rental yield, says Cheong. As it was built 19 years ago, the unit sizes are bigger than those today. Studios are 700 to 807 sq ft, two-bedroom units are 700 to 1,044 sq ft and three-bedroom units are 1,055 to 1,270 sq ft.
The most recent transaction at the development was for a 1,141 sq ft, three-bedroom unit, which sold for $820,000 ($719 psf) in September 2015. Assuming each bedroom can be leased for $900 to $1,100 a month, the rental rate is likely to be $2,700 to $3,300 a month, which translates into a gross yield of 3.9% to 4.4%.
While the gross rental yield appears to outperform the average for most condos in the RCR and even CCR today, Cheong advises potential buyers to check with their banks or finance houses to find out the loan limit they can obtain for residential properties in Geylang, especially those located in the red-light zone, such as Wing Fong Mansions.
A 1,141 sq ft, three-bedroom unit at Wing Fong Mansions sold for $820,000 ($719 psf) last September
“Local banks do not provide loans for properties in the red-light district, especially those located on Lorong 2 to Lorong 24,” says Eugene Huang, director of Red Brick Mortgage Advisory. “The financial institutions that do are Singapura Finance, Hong Leong Finance and RHB, and buyers can borrow up to 80%.”
Meanwhile, Atrium Residences is popular with permanent residents and foreigners who have families as the units are larger than typical condo units in Geylang. And they are relatively affordable, says Cheong. Like Wing Fong Mansions, two-bedroom units at Atrium Residences are 800 to 807 sq ft, while three-bedroom units are 1,001 to 1,300 sq ft, and penthouses are 1,604 to 2,303 sq ft.
The most recent transaction at Atrium Residences was for a 1, 055 sq ft, three-bedroom unit that changed hands for $1 million ($904 psf) in April. A similar-sized unit was listed for rent at $3,100 a month, which gives a yield of 3.7%. The other draw of Atrium Residences is that it is surrounded by eateries and well served by public transport, says Cheong.
A 1,055 sq ft, three-bedroom unit at Atrium Residences changed hands for $1 million ($904 psf) in April
The Sunny Spring is sought after by Singaporean and PR families because of its proximity to good schools such as Khong Hwa School, Tanjong Katong Secondary School, Chung Cheng High School and Dunman High School. It is also a short walk away from the upcoming Paya Lebar Central. The 338-unit project contains three- and four-bedroom units of 872 to 2,121 sq ft. Recent transactions at the development include a 1, 200 sq ft, three-bedroom unit on the eighth floor, which was sold for $1.1 million in March, and a 1,066 sq ft, three-bedroom unit on the fourth floor, which was sold for $1.05 million in May.
A 1,200 sq ft, three-bedroom unit on the eighth floor of The Sunny Spring was sold for $1.1 million in March and a 1,066 sq ft, three-bedroom unit on the fourth floor was sold for $1.05 million in May
“Interest in the development is coming mainly from upgraders who are looking to purchase for their own use,” says Cheong. “Plus, it’s a value buy, with three-bedroom units in the $1 million range. You will be hard-pressed to find a similar-sized freehold condo unit at this price anywhere else in Singapore.
Top 50 searches in Rest of Central Region from Jan 1 to June 19