Geylang’s bohemian residential enclave at Lorong 26 to 38
By Michael Lim
/ The Edge Property |
Mention Geylang and two views of the locale spring to mind. One is that of a place offering a slew of F&B options, ranging from stalls serving local delights such as beef noodle and frog leg porridge, to a hodgepodge of Chinese, Thai, Vietnamese and Indian eating places which stay open until the wee hours. The other is its colourful and vibrant night life, with a host of pubs, KTVs and convenience stores in the traditional red-light areas located between Lorong 4 and 24, where streetwalkers ply their trade.
It is Geylang’s notoriety that has kept many locals from placing it on their radar or calling it home. But what Singaporeans forget is that there are two sides to the area. The lower half that veers towards Kallang is where the traditional red-light district lies, but the upper area that leans towards the upcoming Paya Lebar hub is devoid of unsavoury activities.
“The one area which many Singaporeans tend to overlook is the stretch between Lorong 26 and 38,” says Alan Cheong, head of research at Savills. “Here, it is rather peaceful and safe, just like any other residential neighbourhood. It is not noisy and totally unlike the lower-numbered lorong.”
In fact, sections of this area have undergone regeneration, with new developments containing smallish or shoebox-sized apartments sprouting since 2010. “This part of Geylang has been cleaned up and is now home to families, couples and individuals. That is why I feel safe walking around the area even at night,” adds Cheong.
Geylang also has one unique factor that is seldom seen elsewhere in Singapore: a diverse mix of residential properties. One will find old post-war terraced and detached houses, shophouses and low-rise walk-up apartments interspersed with new modern apartment blocks, all on one street.
The rise in the number of new blocks with shoebox units — one-bedders measuring less than 500 sq ft — has prompted suggestions of an oversupply of such apartments in the area. The truth is far from that. “There may be oversupply island-wide, but not in this micro location of Geylang, where almost all the units have been taken up,” says Cheong. “That’s why, if I had $1 million, I would invest in two shoebox units [here] as they are easy to lease out.”
He notes that at least 75% of the tenants in the newer condos are foreigners, with the remainder being locals who have been living in the area for a long time. “If you were to go to the Paterson Road area at night, [you will see] many empty apartments. But in Geylang, a lot of them are occupied,” he adds.
Aerial view of Geylang Lorong 26 to Lorong 38
The Tuckshop on Guillemard Road is popular with both locals and expats living in the area
Geylang Road has a vibrant night life with pubs, KTVs and convenience stores in the traditional red-light areas located between Lorong 4 and 24
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Close proximity to town
Mark Kong, senior group division director at ERA Realty, who has been marketing units in Geylang for the last six years, says the area’s main draw is its proximity to the city centre.
“While it has never been known to be family-oriented, it is ideal for singles or foreigners who work in the city,” says Kong. “It is served by the Kallang and Aljunied MRT stations, as well as buses on Guillemard and Geylang Roads which take office workers to and from the CBD.”
Living in a shoebox apartment also means that most people treat their residence as a hotel. “After work, you come home to sleep, and the next day, you get ready and go to work again,” says Savills’ Cheong. “That’s why it’s popular with singles and married expatriate couples with no kids.”
Teambuild Land has six residential developments in Geylang, between Lorong 26 and 30, all of which are fully sold. They are the 78-unit Casa Aerata on Lorong 26; La Brisa (84 units) on Lorong 28; Viento (48 units) on Lorong 30; La Fleur (58 units); D’Weave (71 units); and Melosa (54 units). Casa Aerata and La Brisa were completed in 2012, Viento and Melosa, in 2013, and La Fleur and D’Weave, in 2014.
The building boom has created its own checks and balances in Geylang. Richie Chew, executive director of Teambuild Land, laments that the boom has pushed freehold land prices in the area up from between $300 and $400 psf per plot ratio in 2009/10 to the current price of over $700 psf ppr. This brings prices on a par with 99-year leasehold government land parcels.
With the government land sites, developers can build more units and therefore, enjoy higher margins, says Chew. “So, developers are adopting a wait-and-see attitude when it comes to acquiring land in Geylang for redevelopment.”
Casa Aerata, a 78-unit freehold development by Teambuild Land, was completed in 2012
La Brisa is an 84-unit freehold apartment by Teambuild Land and was completed in 2012
The 48-unit Viento , a freehold apartment by Teambuild Land, was completed in 2013
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Dearth in supply
When existing developments in Geylang, such as the 65-unit Rezi3Two by Tee Realty, Kim Seng Heng Realty and Heeton, the 30-unit Loft 33 by Macly Group, and the 145-unit Guillemard Suites by MK 25, are completed within the next two years, there will be no new projects in the pipeline in the vicinity of Lorong 26 to 38. This could be good news for owners of the existing developments.
With no additional supply in the foreseeable future, it will take another six to 12 months before rents start to move up, notes Savills’ Cheong. He forecasts a 10% upside from current rental levels of between $2,000 and $2,100 to $2,200 to $2,400 per month within the next 12 months. At the peak of the market in 2012, rents of shoebox apartments in Geylang were at least $2,600 per month, he adds.
Even at today’s lower rents, yields are still in the 3%-to-3.5% range. “Whenever I walk around the area, I can see that most of the developments are quite well taken up,” he adds. “I would place the average vacancy rate at 5%, and units are being filled up.”
The current limited supply of new residential options in Geylang means existing freehold properties have the potential to appreciate further. Cheong reckons that rental yields and capital appreciation will draw investor interest back to the area.
Early last year, the URA announced that there will be no new residential developments between Lorong 4 and 22. This means there is an opportunity for this section of Geylang, between Lorong 26 and 38, to be rejuvenated from an old estate to a new commercial hub, says ERA’s Kong. The proximity of Geylang to the Paya Lebar Central is another attraction.
Rezi3Two, a freehold 65-unit development by Tee Realty, Kim Seng Heng Realty and Heeton, is scheduled for completion in 2017
Loft 33, a 30-unit freehold development by Macly Equity, is expected to be completed by 2017
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Condo prices in Geylang stable
Freehold condos in Geylang Lorong 26 to 32 that were completed over the past four years have changed hands at prices ranging from $1,200 to just under $1,500 psf.
Macly Group developed several other projects in Geylang. One of them is the 27-unit Cassia Edge on Guillemard Road. Completed in 2015, the most recent transaction at the freehold Cassia Edge was in October 2014: A 646 sq ft two-bedroom unit on the third floor was sold for $860,000 ($1,332 psf). Adjacent to Cassia Edge is the 275-unit Guillemard Edge. Completed in 2014, Guillemard Edge is fully sold. The most recent transaction was a 560 sq ft, two-bedroom unit on the sixth floor that changed hands for $758,000 ($1,354 psf), according to a caveat lodged.
The 27-unit freehold Cassia Edge is a single eight-storey apartment block developed by Macly Group and completed in 2015
The 275-unit Guillemard Edge by Macly Equity was completed in 2014. All 275 units were snapped up within two weeks of its launch in 2012.
At the four-year-old Casa Aerata on Lorong 26, a 603 sq ft, two-bedroom unit on the fourth floor changed hands for $780,000 ($1,294 psf) in July. One street away on Lorong 28 is La Brisa, also completed in 2012. A 440 sq ft, one-bedroom unit on the fifth floor changed hands two years ago for $620,000 ($1,405 psf). And at Vienta on Lorong 30, a 452 sq ft, one-bedroom unit changed hands for $545,000 ($1,206 psf) in May.
Even newer developments are priced within the range of $1,200 to under $1,500 psf. Along Lorong 32 are two freehold condominium projects that are under construction, namely Rezi3Two and Loft 33. Both developments are expected to be completed by 2017.
Loft 33 is fully sold, with the latest transaction in July 2014, where a 710 sq ft, two-bedroom unit fetched $855,000 ($1,204 psf). ReziTwo is 89% sold as at end-September. The most recent sale was that of a 463 sq ft, one-bedroom unit on the third floor in June this year. It fetched $692,200 ($1,496 psf).
Therefore, Savills’ Cheong sees opportunity in Geylang, where prices and rents have been relatively stable. “People should take a closer look at the part of Geylang closer to Paya Lebar, which is also being gentrified,” he says.
“There is hardly any hint of the old Geylang there. It’s the lower, even-numbered lorong that will give you a potpourri of the sights, colours, sounds and smells of old Geylang.”
This article appeared in The Edge Property Pullout, Issue 753 (Nov 7, 2016) of The Edge Singapore.
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