Rental volume in the Core Central Region (CCR) saw a 22% jump to 10,213 contracts in 1H2015 from 8,370 a year ago. This was accompanied by a 26% surge in the number of rental contracts for condominium units in Sentosa Cove from 253 to 319 over the same period. Meanwhile, URA’s rental index of non-landed homes in CCR fell 7% from its peak of 117.8 in 3Q2013 to 109.3 in 2Q2015, which was outpaced by the decline in Sentosa Cove where median rents plunged 12% over the same period (see table).
“We have been receiving more leasing enquiries for high-end properties as rents become more affordable,” says Norris Low, head of residential leasing at Knight Frank Singapore.
Based on the rental contracts for units of similar size within each development, the average monthly rent for Sentosa Cove condos declined between 7% and 18% from 3Q2013 to 2Q2015.
The decline in rent has been a boon for rental activity. The surge in rental volume was led by the Seascape, followed by The Oceanfront @ Sentosa Cove. Leasing demand for Sentosa Cove properties is expected to grow, especially as rents continue to head south, owing to their niche appeal. “Tenants in Sentosa Cove are willing to trade convenience for the tranquillity and waterfront living, which are not replicable elsewhere in Singapore,” says Low.
However, there is an interesting trend where the average monthly rent for condos located further away from the Sentosa Cove Arrival Plaza has fallen more sharply than those located closer, with the exception of the Marina Collection. This is probably because of the amenities, shops and eateries located at the Plaza and the adjacent Quayside Isle. It would seem that, while tenants are willing to compromise on the greater convenience of being on the mainland, they still appreciate a shorter walk to the nearby shops and eateries.
This article appeared in The Edge Property Pullout of Issue 690 (August 17) of The Edge Singapore.