Higher rental return from compact apartments

Compact apartments here are providing much higher rental return for investors than other apartment types.

Compact apartments or popularly known as shoebox apartments are typically residential units with area of less than 500 square feet.

Compact apartments are well received by investors in general due to the lower price quantum required to purchase these class of property assets.

Source from the Singapore Real Estate Exchange (SRX) reveals that gross yields for these units were 5.4 per cent in the first quarter of 2012.

This is clearly exceeding the 2.5 to 3.5 % return that typical type of residential properties provides to property investors.

The SRX shoebox units yield was based on the average rent of $6.51 per sq ft per month from the 197 leasing transactions recorded for this period. The median unit price for these homes sold was $1,450 psf during this period.


21 Apr 2012