Year in Review 2019: Highest-yielding condominiums in S'pore

The Hillford in Bukit Timah reigns as the highest-yielding condominium in Singapore in 2019. (PHOTO: EdgeProp Singapore)

SINGAPORE — With gross rental yields in Singapore hovering around 3.3 percent, prospective homebuyers can now identify which private condominium projects deliver the highest returns in terms of rent.

How to calculate property gross rental yield? We took the annual rental income within a development and divided it by the recent resale transaction prices within the same project.

Only properties that had five or more sales and rental transactions in the last 12 months were considered in this analysis. This is consistent with research methods applied to source for the highest-yielding condominiums in Singapore last year.

Here’s a list of the top ten condominiums projects that commanded the highest rental yields in Singapore as of November 2019.

Project Name	Tenure	Completion	Number of units	Rental Volume	Rental Yield (%)	Location
THE HILLFORD	60 yrs from 2013	2016	281	128	4.6	Bukit Timah
CENTRAL IMPERIAL	Freehold	2014	63	30	4.3	Geylang
PEOPLE'S PARK COMPLEX	99 yrs from 1968	2002	288	84	4.1	Outram
MELVILLE PARK	99 yrs from 1992	1996	1,232	302	4	Tampines
PARC IMPERIAL	Freehold	2010	138	98	4	Queenstown
THE PROMENADE@ PELIKAT	Freehold	2015	164	67	3.9	Hougang
SKYSUITES@ ANSON	99 yrs from 2008	2014	360	216	3.9	Downtown Core
NORTHOAKS	99 yrs from 1997	2000	720	101	3.8	Woodlands
PRESTIGE HEIGHTS	Freehold	2011	154	77	3.8	Novena
THE CLIFT	99 yrs from 2004	2011	312	210	3.8	Downtown Core

Here are some points worth noting about these properties:

1) Leasehold condominiums topped the list

Majority of the condominiums on the list are leasehold properties. This is with the inclusion of The Hillford, Singapore’s pilot retirement residence — an unprecedented 60-year leasehold private condominium. The revelation is in tandem with conventional wisdom, as gross rental yields are typically calculated based on annual rental income divided by total cost of property, and hence would not be affected whether properties are leasehold or freehold. Freehold properties are typically expected to be more costly in terms of psf compared to leasehold properties.

The Clift in the Downtown Core district commands one of the most expensive rental rates in Singapore. (PHOTO: EdgeProp Singapore)

2. Location, location, location

Several properties are located within the Core Central Region (CCR) and the Outer Central Region (OCR). The convenience and accessibility of such properties, being located near the bustling Central Business District (CBD) and easy access to nearby local attractions, make such estates highly attractive to prospective tenants. In fact, the most expensive rent rates were found in the Downtown Core district, such as SkySuites@Anson and The Clift . In contrast, properties found in the Rest of Central Region (RCR), such as Melville Park in Tampines and NorthOaks in Woodlands are deemed choice estates due to their close proximity to major transportation nodes such as the Changi Airport and Johor-Singapore Causeway, respectively.

3. In with the new

Most of the properties on the list have all been recently developed within the past decade, with the most mature condominium, Melville Park, being completed in 1996, and the most recent condominium, The Hillford, being completed in 2016. The attractiveness of such residences could be due to the newer facilities and amenities available as well as easier maintenance. Due to the nature and limited units of these condominiums, it is likely that residents have acquired such properties for investment purposes, such as for earning rental income. This could be due to newer condominiums being smaller on average in terms of sizes compared to more mature estates. Such units would hence be more attractive and suitable for prospective tenants, ideally seeking studio apartments, or one or two bedrooms. Landlords would thus prefer to rent these apartments out than reside within it personally.

With future property developments and ongoing implementation of the URA Draft Masterplan 2019 into the next decade, one would benefit greatly from considering the characteristics of this year’s top performing private condominium projects, in selecting an optimal property investment or future home.

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