Home is where the schools are

The growing presence of international schools in suburban areas may lead to a pickup in private suburban rents this year.

Expatriates with families could choose to relocate to these areas for purposes of convenience, said HSR Property Group’s head of special projects, Mr Dennis Yong.

International schools are being built in suburban areas like Districts 17, 18 and 19, he said.

District 17 spans across Changi, Loyang and Pasir Ris. Next to Pasir Ris, Tampines and Simei make up District 18. In the north-east, District 19 encompasses Hougang, Punggol and Sengkang.

Some international schools in these areas include the Australian International School and the Stamford American International School, both in Lorong Chuan in Upper Serangoon in District 19.

The former moved to Lorong Chuan in 2003, and the latter last August. In Tampines, The United World College of South-east Asia will be opening its new east campus by next year. Its present east campus is in Ang Mo Kio. Its main campus is in Dover Road.

Based on Urban Redevelopment Authority (URA) data on median rental rates in the third and fourth quarters of last year, rents in these districts have seen some notable increases.

Loyang Valley rates have gone up by 29 cents to $1.77 per sq ft per month (psf pm). At Estella Gardens in Pasir Ris, rates went up by 24 cents to $2.11 psf pm.

Rents at properties in District 19 (Hougang, Punggol and Sengkang) – like Chiltern Park, Chuan Park and Compass Heights – have gone up by 31, 24 and 23 cents respectively.

Director of research and advisory at Colliers International, Ms Tay Huey Ying, said the presence of international schools will help contribute to leasing demands. Ngee Ann Polytechnic real estate lecturer Nicholas Mak said rental gains will most likely be in properties located closer to the schools.

For this year, Colliers expects marginal increases of 0 per cent to 3 per cent in suburban rents.

Savills Singapore also maintains the view that suburban rents will remain stable with small gains, if any.

Away from suburbia, things are also looking up for high-end rentals. Non-landed properties in prime districts – Orchard, Bukit Timah, River Valley, Newton, Marina Bay and Sentosa – saw a 0.9 per cent increase in rentals in the last quarter.

Prime rents have appreciated, largely due to the improving economy, resilient local job market and the return of expatriates, said director of corporate residential leasing at Savills Singapore, Mr Patrick Lai.

Savills expects that high-end private home rents will hold steady and rise up to 10 per cent this year. But movements will ultimately depend on supply and demand, Mr Joseph Tan, executive director, residential at CB Richard Ellis (CBRE) added.

Depending on the types of expats and if there is demand for the more than 3,000 new high-end homes expected to be completed this year, rents will increase at a gradual pace, he said.

Mr Donald Yeo, executive director of marketing at HSR Property Group, sees city-fringe areas, where rentals had increased by just 0.1 per cent in the last quarter, to hold more promise. Rentals in city-fringe areas are relatively more economical and expatriates are not averse to commuting, he said.

Mr Tan of CBRE believes that though competition for tenants will be keen, city-fringe rents could see more significant increases if economic growth remains on track.

Mr Lai said that according to last year’s fourth quarter URA data, private housing supply this year will be about 7,584 units – lower than last year’s 10,448 units. With lower supply and healthy leasing volume, rents are ‘likely to remain on the upward trajectory this year’, he said.

Source: Sunday Times, 14 Feb 2010