Alexis — one of the first and biggest shoebox developments, with 293 residential units sitting on top of 21 strata shops — was completed in 2012. When it was launched in 2009, all the units were snapped up within the first weekend of preview. The project was developed jointly by Yi Kai Group and Fission Group and its successful launch was the catalyst that sparked a wave of shoebox units in mixed-use developments.
A freehold development, Alexis contains a mix of one- and two-bedroom units. The one-bedroom units measure 366 to 527 sq ft; one-bedroom-plus-study units measure 474 to 764 sq ft. Meanwhile, two-bedroom units are from 527 to 1,033 sq ft while two-bedroom-plus-study units are from 657 to 1,055 sq ft. There are also penthouses which are sized from 764 to 1,518 sq ft. Prices back then averaged $1,046 psf.
All 21 shops at Alexis are leased now, and the one-bedroom units continue to draw
investors with its still-attractive gross yield of about 4%
From January to October this year, seven apartments at Alexis have changed hands, compared with just five last year and 10 in 2013, based on caveats lodged. Those who bought their apartments when the development was launched six years ago and sold them at today’s prices can still see a significant upside.
This was evident in the most recent transaction: A 398 sq ft, one-bedroom unit on the fifth floor changed hands for $700,000 ($1,758 psf), according to a caveat lodged with URA Realis on Oct 26. The sale price was 53% higher than the original purchase price of $458,000 ($1,150 psf), which the seller paid in 2009.
One-bedroom units at Alexis can still command monthly rental rates of $2,500, says Spencer Ng, senior marketing director at ERA Realty Network. “The small units at Alexis remain attractive because the rents are more than enough to cover the investors’ monthly loan repayments even at today’s prices,” he explains.
Based on a monthly rental rate of $2,500, the buyer of the one-bedroom unit for $700,000 will have a gross rental yield of 4.2%. Assuming the buyer is an investor and it is his second property, the borrowing limit is 50%, or $350,000. Based on an interest rate of 1.5% and a 30-year loan period, Ng estimates that the monthly mortgage payment translates into $1,208.Thus, the monthly rental rate of $2,500 is enough to cover the mortgage and other expenses as well as earn an income for the investor, he adds.
Ng brokered the two recent transactions at Alexis in August and September as well. Both were also one-bedroom units. The unit sold in September was a 388 sq ft, third-floor unit and it fetched $740,000 ($1,910 psf). The previous owner had purchased it in a sub-sale for $605,000 ($1,561 psf),thus seeing a 22.3% capital appreciation. The one sold in August was a 420 sq ft unit that went for $700,000 ($1,667 psf). The previous owner paid $643,000 ($1,532 psf) for the unit in a sub-sale, thus his gain was 8.9%.
While the residential units have been able to attract tenants, the 21 shop units on the first floor have had a harder time filling up. After a slow start, all the shop units have now been leased, with rental rates ranging from $8 to $9 psf per month, according to marketing agents.
There have also been fewer shop units changing hands at Alexis. The most recent transaction was that of a 258 sq ft unit, which was sold for $1.15 million ($4,452 psf) in August. The seller suffered a 10.9% loss, as he had paid $1.3 million ($4,794 psf) for the unit in a sub-sale in 2012.
“Investors of the residential units at Alexis are able to realise their returns immediately,” says Donald Han, managing director of Chestertons Singapore. “The units at Alexis are also freehold, compared with the new launches in the Alexandra area, which are 99-year leasehold, such as Alex Residences, Commonwealth Tower and Principal Garden.”
Projects in the Alexandra area
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This article appeared in the City & Country of Issue 703 (Nov 16, 2015) of The Edge Singapore.