Tag Archives: Guocoland

Geylang – Looking past red lights to hot yields

THE red lights that dot Geylang might reflect the area’s seamy side, but they have not stopped developers from flocking in with new condominium projects.

The area, bounded by Sims Way and Paya Lebar Avenue, has seen a flurry of new launches over the past three years – at least one has sprung up on each of its famous lorongs, or streets.

Despite its colourful history, rental yields there are among the highest of any suburban residential district, experts say. Leasing activity is tipped to surge with the formation of a commercial centre at nearby Paya Lebar Central.

“It’s worth looking at. All capital appreciation is a by-product of rental yields,” said Mr Mohd Ismail, the chief executive of real estate firm PropNex.

“Rental yields are as high as 5 per cent, when market norms are about 3 per cent, simply because tenants are prepared to rent rooms rather than the whole unit. A two-bedder could be leased out for about $1,000 per room.”

The area’s proximity to the city centre and business district is a draw for office executives, most of whom are Chinese tenants attracted by a fast-forming Chinese community there, market watchers say.

Among the developers keen to cash in on this appeal, the newest kid on the block is a joint venture by MCC Land, Sustained Land and Greatview Development. Its TRE Residences at Geylang East Avenue 1 lies on the “right side” of the red-light district.

The 250-unit project is being launched today. Indicative starting prices range from $693,500 for a 420 sq ft one-bedder to $1.36 million for a 947 sq ft four-bedder, said MCL Land.

TRE comes ahead of a larger project by GuocoLand at Sims Drive – the 1,024-unit Sims Urban Oasis – which is due to be launched early next year.

Older completed developments such as the 262-unit Central Grove have achieved capital gains, with a 1,206 sq ft unit selling for a profit of $686,000 in September and a 1,277 sq ft unit bringing in a profit of $716,000 in July.

The price works out to about $1,000 per sq ft (psf) – a level that R’ST Research director Ong Kah Seng deems “attractive” for a “well-located” project.

He noted that an upcoming mixed-use development, with a potential gross floor area of 1.78 million sq ft, in Paya Lebar Central is likely to draw in MNCs looking for office space. Thus, investors could benefit from rental demand from Asian professionals working in the area.

Two luxury projects compete for buyers

Situated right across each other, two luxury condominiums compete for luxury buyers amidst a tougher environment as the residential market slows, said media reports.

Located along Leedon Heights in District 10, the two projects – Leedon Residences and d’Leedon – are only a five-minute drive from Orchard Road.

The larger project, d’Leedon, features over 1,700 units, with sizes ranging from 592 sq ft, for a one-bedroom apartment to garden villas of over 8,000 sq ft. Prices range from $1.3 million for the one-bedders to $7.7 million for the villas. The seven building complex is slated to be completed this year.

Meanwhile, Leedon Residence offers 381 units ranging from 1,044 sq ft two-bedders to more than 8,000 sq ft penthouses. Leedon prices start at $2.2 million for two-bedders and the project is expected to be completed in 2015.

While majority of the units at both projects were snapped up, the unsold units face a tougher climate as the effects of the government’s various cooling measures start to bite.

In Q1 2014, sales of luxury condos plunged by more than 60 percent over the same period last year, said DTZ.

DTZ’s Research Head Lee Lay Keng said, “Some developers of luxury projects could be more willing to negotiate on prices.”

A spokesperson for d’Leedon’s developer, CapitaLand Singapore, declined to comment on any price changes at the development, but noted “developers have to make necessary adjustments in view of the prevailing market conditions.”

On the other hand, GuocoLand, the developer of Leedon Residences, revealed that it has maintained its prices.

As of April 2014, JLL data show that launched but unsold units at d’Leedon stands at 268 while Leedon Residence still has 100 units on the market.

“Buyers are becoming more discerning with their purchases and are quite price-sensitive,” said Chua Yang Liang, Head of Research at JLL.

Source : PropertyGuru