Geylang a growing hot spot for investors

Geylang a growing hot spot for investors

Mention Geylang and an unappetising image of shabby shophouses, street girls and sleazy budget hotels springs to mind.

But the much-maligned area is a growing hot spot for savvy property investors chasing high capital gains and rental yields.

There are at least 40 projects, comprising 2,190 units, that will be launched or completed in the next five years or so.

This will bring the total number of homes in the area to more than 5,500.

There have been 22 launches since 2010 - putting a total of 1,438 units on the market - with 18 to come.
The 78-unit Casa Aerata at Lorong 26 and the 62-unit Centra Suites at Lorong 25A are the latest projects to be completed.

The buoyant market seems to fly in the face of conventional real estate wisdom, which demands good transport links and other key facilities to attract buyers.

Geylang, which is infamous for its red-light district and registered brothels, does not have an MRT station, although it is a short drive or bus ride from the city centre. But bad traffic conditions often plague drivers, a situation worsened by the quick pace of development in recent years.

Traffic has increased markedly, leading to parking space shortages along the narrow lanes, also known as "lorongs".

There are no big malls in the area and at night, it is a common to see prostitutes plying their trade along some of the even-numbered lanes.

Yet rental demand is strong, with yields of about 5 per cent, higher than those at suburban condos, Mr Lee said. For instance, a two-bedder at Casa Aerata that was bought for $600,000 has been rented out at $2,800 a month, a yield of 5.6 per cent.

The Government's plan to develop the 64ha Kallang Riverside and Paya Lebar Central areas will also give Geylang, sandwiched between both spots, an extra boost.

But experts warned that potential buyers or investors could face a problem getting bank loans, given the area's reputation and plethora of shoebox units.

OCBC Bank said it assesses all home loan applications on a case-by-case basis, regardless of the property's location.

Source: The Straits Times – 29 September 2012