Geylang: The rental area of choice

Geylang produces conflicting reactions in Singaporeans. On the one hand, it is a hotbed of vice: A haven for gambling, sex-for-sale and contraband cigarettes. On the other hand, it is a food paradise and a vibrant untamed neighbourhood in contrast to the clockwork efficiency in much of the rest of Singapore.

Look deeper into Geylang, however, and many will be surprised to find that it is one of Singapore’s most sought-after rental post codes — and for the last 15 years, as 99.co’s research and intelligence have revealed.

Many Singaporeans will agree that Geylang needs social gentrification. Since the 1980s, Geylang has been the epicentre of Singapore’s legalised prostitution scene. While the brothels are licensed, many activities in Geylang are not. Contraband cigarettes, backstreet gambling, illegal streetwalkers and dodgy aphrodisiacs packaged as “sex pills” — Geylang has it all.

Nonetheless, Geylang is a vibrant district, one of the few places in Singapore where old-school, first- and second-generation hawkers ply their trade. It is where Singlish and dialects are mixed into a constant hum, with members of clan associations practising traditional wushu and lion dances.

Few people want to be recognised as a Geylang landlord. In fact, many homeowners who lease out their residential units have a reputation for being slumlords. It comes as no surprise then, that more often than not, banks are unwilling to grant home loans to consumers wanting to buy a residential property in Geylang.

If there is a foreclosure, homeowners may have trouble finding buyers.

Yet, 99.co’s research and intelligence have shown that contrary to popular perception, Geylang is a prime location that has never seen a shortfall of renters in the last 15 years, enjoying a rental occupancy of 100 per cent!

It is very accessible to the CBD, financial and shopping districts. By car, Geylang is a little over 10 minutes from the CBD, financial and Marina Bay districts. By train, it is serviced by Aljunied and Kallang MRT stations. Geylang is also home to some of Singapore’s best eateries and has a reputation for cheap electronics. It also has a sports and recreation centre. Ignore the red-light district, and you have all the key qualities of a prime location.

So while Geylang is not family-friendly, it is ideal for singles or foreigners who view accessibility to their workplaces as a priority. Recent re-zoning laws also mean Geylang could become a goldmine, even as a family home. The Urban Redevelopment Authority (URA) is barring further residential development between Lorongs 4 and 22 in Geylang, with the land to be used for commercial development. The now limited supply of residential options in Geylang means existing freehold properties have the potential to appreciate further.

Geylang has witnessed property value spikes in recent years. According to a property agent in a Geylang showroom, and two investors whom 99.co spoke to, property values have increased from S$1,100 per sqf in 2012 to S$1,400 per sqf in the present.

The latest check by 99.co shows an average overall price of about S$830,000 for a Geylang property, cheap for a unit within 10 minutes’ drive of the CBD. The anticipated relocation of Paya Lebar airbase is expected to lift height restrictions in Geylang. Taller condominium blocks in Geylang will mean rising land values.

These data points and shared sentiment among agents and investors are proof that demand from single and foreign tenants has been strong since the late 1990s. In fact, one of the investors pointed out that in all the properties he owned, his residential unit in Geylang is the only one that has never seen a vacancy in over 15 years.

Investors 99.co spoke to claim rental returns of around 6 per cent in Geylang. One of these units is a shoebox apartment at Prime Residence at 41 Lorong 22. The apartment size is around 400 sqf and rental income is S$3,200 a month. A quick check on 99.co’s listings reflects rental prices ranging from a lower median of S$2,500 to S$3,000.

Yet, with new restrictions on residential properties, landlords in Geylang will be free from competition in the area in the coming years. And for potential investors, Geylang holds pleasant surprises and may be an excellent buy for the open-minded.

ABOUT THE AUTHOR: Darius Cheung is CEO of 99.co, a property portal he founded in January 2014 together with Dominic Ee, Conor McLaughlin and Anuj Bheda. 99.co has raised funds from investors including Sequoia Capital and Facebook co-founder Eduardo Saverin.