Far East Property Sales, Singapore
30 Merchant Road, Riverside Point,
#02-18 to #02-23 Singapore 058282
Tel +65 6428 8585 Fax +65 6538 2364
20 April 2012
Shoebox flats rake in higher rental yields
Tiny 'shoebox' homes here are raking in much higher rental yields for investors than
other apartment types but experts warn the good times might not last.Data from the
Singapore Real Estate Exchange (SRX) found that gross yields for shoebox apartments
were 5.4 per cent in the first three months of the year.This is well above the 2.5 to 3.5
per cent yields that residential properties typically return to investors.The SRX shoebox
yield was based on the average rent of $6.51 per sq ft (psf) per month for the 197
leasing deals inked in the period. The average unit price of the 123 shoebox homes sold
then was $1,450 psf.Shoebox units are typically 500 sq ft or smaller and can be found in
projects like Parc Imperial, Thomson V One and Prestige Heights.Experts say investors
have flocked to the shoebox segment in droves, attracted by the affordable prices typically less than $1 million. In fact, about one in seven buyers picked up new homes
500 sq ft and smaller last year, according to R'ST Research.And the climbing yields seem
to be the main driver pulling investors in. The number of these small homes is expected
to double from about 4,100 units later this year to 8,200 units by the end of 2015.
Experts note that many of the completed shoebox apartments are in good locations
such as in the city fringe area and River Valley area and are thus commanding decent
rentals now.
Quoted in The Straits Times Online