Rental woes: Which projects outperform the market?

By Feily Sofian / The Edge Property | March 24, 2016 10:22 AM SGT
The Urban Redevelopment Authority released the February rental data for private residential properties on March 15. Based on data for the first two months of 2016, the median monthly rents for private non-landed homes dipped 5% y-o-y from $3.54 psf in 1Q2015 to $3.37 psf in 1Q2016. Overall, rents have declined about 10% from 3Q2013’s peak.
While the rental woes afflict most properties, at least one segment has outperformed its peers. Recently, integrated developments are back in the spotlight as the launch of Cairnhill Nine drew strong interest from buyers. There is some evidence that these developments have weathered the recent market turmoil better than others. The trend was not as clear when we conducted a similar study last year but became more pronounced recently.
These projects are not necessarily connected to an MRT station and a shopping mall, but they are located within a short walking distance of these amenities. At The Centris, a 610-unit condominium located next to Boon Lay MRT station above Jurong Point, average monthly rents for its three-bedroom units fell just 5% from $3.53 psf in 1H2013’s peak to $3.36 psf in 4Q2015 and 1Q2016. In comparison, the average monthly rents for three-bedroom units at Summerdale, a privatised executive condo located 800m away from the Boon Lay MRT station, dipped 14% from $2.77 psf to $2.37 psf over the same period.
Summerdale was completed in 2000, while The Centris was completed in 2009. There could be age and other factors in play, which the study could not account for. Three-bedroom units were used for comparison as Summerdale does not have two-bedroom units. Jurong Point is one of the largest shopping malls in Singapore, with a total net lettable area of about 750,000 sq ft.
In the eastern region, the average monthly rents for three-bedroom units at Modena declined 7% from $2.76 psf in 1H2013 to $2.57 psf in 4Q2015 and 1Q2016. Completed in 2001, Modena is located across the Simei MRT station and Eastpoint Mall. Meanwhile, at Eastpoint Green, a condo located further away from the Simei MRT station, monthly rents for three-bedroom units fell...