Rental yield for shoebox units in suburbs reasonably high

Posted on 3 Dec 2014 | Comments Off on Rental yield for shoebox units in suburbs reasonably high

The rental yield of shoebox units in the suburbs are comparable to those in the city, said property analysts and reported in the media.

However, they caution that landlords may not get the kind of rental income they expect in the near future, considering that the Urban Redevelopment Authority (URA) predicts around 11,000 shoebox units by end-2015.

Measuring less than 500 sq ft in size, shoebox units are typically one-bedroom units with a bathroom.

Alan Cheong, Head of Research at Savills Singapore, said the rental yield of shoebox units in the suburbs are about three percent compared to the two to three percent yield of other types of private homes.

He noted shoebox units are particularly popular among single expatriates because their companies either hired them on local employment terms or have slashed their housing budget.

Shoebox units priced within $2,000 to $3,000 are at an advantage, said Cheong.

Chris Koh, Director of Chris International, noted while the appeal of such units continues to be strong among investors, he warns that tenants have other choices. “With a budget of $2,500 to $3,000, there are some outskirt condominiums with two and three bedrooms that they can rent. So, they do make comparison with these shoebox units because these units are rather small.”

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Collective sale for Derby Court

Posted on 3 Dec 2014 | Comments Off on Collective sale for Derby Court

Real estate firm Savills has launched Derby Court, a boutique freehold site located in the prime District 11 Novena enclave, for collective sale.

The 12-storey development (pictured) occupies a corner plot of approximately 1,719.3 sqm at 5 Derbyshire Road. The 35-year-old development consists of 20 apartments with an existing gross floor area of 4,932.61 sqm.

The site enjoys convenient access to Novena MRT station, Orchard Road and the central business district. It is also situated within 1 km of schools such as St Joseph’s Institution (Junior) and Anglo Chinese School (Junior), and is a short walk to three established malls – United Square, Velocity@Novena Square and Square 2.

The collective sale of Derby Court has an indicative price of S$68.28 million, or S$1,286 psf ppr based on the allowable Gross Floor Area of 53,094 sq ft.

The land rate would be lowered to approximately S$1,169 psf ppr including the 10 percent bonus gross floor area space allowable for balconies. The site can potentially accommodate up to a maximum of 70 new apartments averaging 753 sq ft with an estimated breakeven cost exceeding S$1,700 psf.

Suzie Mok, Senior Director of Investment Sales at Savills Singapore who is handling the sale, said: “Derby Court presents a rare and exciting investment opportunity. We expect the site to draw interest due to its locational attributes, established amenities and compact size. Sites with absolute price quantum of less than S$70 million for a high-rise 36-storey development are few and far between. This is a sweet spot to boutique developers in the present market”,

The tender for Derby Court will close at 3pm on January 20, 2015.

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