THE Telok Kurau neighbourhood has undergone a major transformation in recent years, with old houses replaced by low-rise condominium and apartment blocks, typically of 50 to 100 units. The rapid redevelopment of the area has led to a proliferation of shoebox apartments, which has also changed the profile of residents in the area.
These days, the area is populated mainly by singles and young couples with no children, says Jessica Ng, a property agent from OrangeTee, who is marketing a 441 sq ft one-bedroom unit in Parc Elegance. The 157-unit Parc Elegance, located on Telo Kurau Road, is a project by listed property developer Fragrance Group and launched in late March to early April 2010. It is fully sold and expected to be completed later this year.
Most recently, a 398 sq ft unit at Parc Elegance changed hands for $610,000 ($1,532 psf), according to a caveat lodged with URA Realis on March 18. This is the second-highest price psf achieved in the project. The highest was the sub-sale of a 441 sq ft unit for $740,000, or $1,677 psf, in May 2010.
The original owner of the 398 sq ft unit at Parc Elegance had an HDB address and purchased the unit for $516,000 ($1,296 psf) in 2010. "Such shoebox apartments priced around half a million dollars have attracted many investors with HDB addresses, given the bite-size quantum," observes Tony Koe, executive director of SLP International "From an investor's point of view, with rental rates of such shoebox apartments in the range of $2,000 to $2,500 a month, the rental yields are still attractive, at 4% to 5% a year."
OrangeTee's Ng agrees, saying that the tenants of such units include a good mix of locals, permanent residents and expatriates, many of whom are singles or couples who work long hours and just need a room to sleep in and a place to take a shower. Thus, they do not mind living in a compact apartment, she adds. After renting for some time, these tenants also hope to be able to afford to buy their own home eventually; thus, most of the leases are for 12 months.
Fragrance Group was one of the early movers in the Telok Kurau neighbourhood and is often credited as a pioneer of shoebox apartments, having developed many such projects in the area. Besides Parc Elegance, another project by Fragrance is the 48-unit The Cotz, also located on Telok Kurau Road. Launched in 2009, the project was fully sold and completed about two years ago. The most recent transaction at The Cotz was that of a 388 sq ft unit that changed hands last month for $570,000 ($1,471 psf). The unit was purchased by the previous owner for $460,994 ($1,190 psf) when the project was launched in late 2009.
Le Conney Park, a 44-unit boutique condo project completed in 1995 and developed by KK Development, is located on Lorong L Telok Kurau. The development pre-dates the trend of shoebox apartments; thus, units in the project measure 560 to 1,615 sq ft, with most units larger than 1,000 sq ft. A 1,044 sq ft unit changed hands last month for $1.05 million ($1,001 psf), according to URA Realis.
Far East Organization has also introduced its concept of SOHO residences in the area with its 222-unit The Seawind, which has a double frontag — one on Lorong M Telok Kurau and the other on Lorong N. Since the project was launched in late 2011, about 140 units have been sold at a median price of $1,506 psf as at end-February. The project contains a mix of SOHOs, townhouses and one- to four-bedroom condos.
There are two more projects that will be launched next month in the Telok Kurau neighbourhood and are marketed by SLP International. Despite complaints about traffic congestion and overbuilding, which led to government measures to limit the maximum number of units that can be developed as well as the minimum plot size for redevelopment in the Telok Kurau area, SLP's Koe is confident that the area will continue to appeal to singles and young couples, given its proximity to amenities including eateries, shopping malls such as [email protected] and Parkway Parade, and public transport.
This story first appeared in The Edge Singapore weekly edition of Apr 08-14, 2013.
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