Shoebox prices are presently commanding a 33.5% premium over all non-landed property values.
According to Savills Research, in Singapore, the definition of a shoebox unit is confined to size. The Minister of National Development blogged that it is an apartment of less than 500 sq ft; however, there are others who believe that it should include units of up to 700 sq ft.
The Urban Redevelopment Authority (URA), in its latest planning guidelines computing the maximum number of dwelling units on development land, uses 753 sq ft, but did not say explicitly that this refers to shoebox
For the purposes of this report, the definition of a shoebox unit will be taken to mean units of less than 500 sq ft. Shoebox units started to take root in the latter half of the last decade. The completed apartments currently hitting the leasing market were those marketed in 2007 and 2008.
Even then, the numbers launched and sold over these two years totalled only about 500. By 2010, these units became popular, with new sales hitting a high of about 1,700 units before petering out at 665 units in 2011.
With the URA stepping in to restrict the maximum number of dwelling units on development plans approved on or after 4 November 2012, the age of the shoebox unit is over for non-core central regions (CCR) of Singapore.
Henceforth, only the CCR, which encompasses prime residential districts 1, 2, 4, 9, 10 and 11, will be permitted shoebox units so we can expect the supply and sales of such units to decline from now on.
Shoebox prices are presently commanding a 33.5% premium over all non-landed property values, and are currentlytransacting at about S$1,547 (US$1,259.9) per sq ft versus S$1,159 (US$943.9) per sq ft for all non-landed properties.
Rent wise, shoebox units also command a significantly higher rate on a dollar per sq ft basis. The average rent of a shoebox unit is currently above S$6.5 (US$5.3) per sq ft per month. This represents a significant premium to larger units.
For example, for units that are between 501 sq ft and 1,500 sq ft, rents are fetching, on average, S$4.2(US$3.4) per sq ft per month, 35% below shoebox unit rates.
Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Senior Sales Director
DTZ Debenham Tie Leung (SEA) Pte Ltd (L3006301G)
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