Soaring demand for shoebox units in rental market
By The Edge Property
/ URA, theedgeproperty.com |
Demands for shoebox units have been going strong in the rental market. Based on data released by URA, the number of shoebox units rented out in January and February this year surged by 54% y-o-y to 615 rentals records. This represents 94.3% of the total rental contracts for shoebox units recorded in 1Q14.
Overall, the number of shoebox units rented in 2014 increased by 62.1% as compared to 2013 with a total of 3,327 rental contracts transacted. Although all 3 geographical market segments saw an increase in shoebox units rented out, the largest increment was observed in RCR which swelled by 61.8% h-o-h in 2H14. The accretion is largely attributed to developments completed in 2014 where at least 43.6% or 850 out of 1,949 rental contracts were from projects completed in 2014 of which 56% were from RCR.
Contrary to the growth in rental volume, median rent of shoebox units have been declining island wide since 4Q13 after spotting a slight increase in 3Q13. With at least 5,000 more shoebox units soon to be joining the rental market between now and 2017, median rent may continue to be suppressed as it gets increasing competitive with more supply and suppressed demand in the rental market.
Table 1: Number of Shoebox Units Rented Out (by Quarter)
Note: Excludes rentals with unknown geographical region
Top 20 Projects with the highest number of shoebox units rented in 2014
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