It's A Landlord's Market In Geylang

Source : The Electric New Paper, May 13, 2008

LANDLORDS in Geylang are smiling all the way to the bank.

Mr Khoo Mui Hoon, 65, the previous landlord of Tanjong Rhu Pau, is all for the buzz and high traffic in the area.

He was happy to get $30,000 a month for the place and said his new tenant will run a coffee shop there.

The renovation work includes hacking down a wall at the back of the unit to enlarge it to 2,300 sq ft.

Mr Khoo said the tenant runs two other coffee shops nearby.

He claimed there had been five offers of more than $30,000 to rent the unit, and one of $400,000 to buy it.

'In choosing the tenants, it is not about the highest offer. I have to check their backgrounds, and make sure they are trustworthy, and will pay the rent on time,' he said.

Mr Khoo had purchased a corner unit coffee shop on Lorong 14 in 2006 for about $300,000, and sold it for about $400,000 a few months ago.

'I am always on the lookout for properties, and I set my eye on Geylang two years ago when I noticed many coffee shops were enjoying good business,' he said.

Commercial property agent Celia Chan, 45, said rentals were rising mainly for commercial properties.

WEAK DEMAND

'For residential properties, the demand is still weak because Geylang is a red-light district,' she said.

She said that in the stretch from Lorong 3 to 20, rents for commercial units are $10 to $15 per sq ft.

On average, a 2,000-sq-ft unit here can fetch a monthly rent of between $20,000 and $25,000.

In the stretch between Lorongs 20 and 30, rents are $6 to $10 per sq ft. Further out, in the stretch between Lorongs 30 and 40, the rent is only $4 to $6 per sq ft.

'Units along the side lanes which see a smaller volume of traffic are valued at 30 to 50 per cent less than those along the main road,' she said.

Along the hottest stretch of Geylang, corner units are more in demand because they can be used for coffee shops, the key business in the area.

While Miss Chan felt several factors are contributing to the boom in commercial property prices in Geylang, she acknowledged that the presence of the women from China has played a role in pushing up the prices.

She said: 'They create a buzz of activity and this in turn generates business for the coffee shops.

'That the presence of prostitutes can help drive up property prices is a phenomenon unique to Geylang.

This article was first published in The New Paper on May 11, 2008.