New zoning rules fuel investors' appetite for Geylang shophouses

Eleven deals have been closed this year.

Geylang's shady reputation is often enough to scare property investors away, but the new zoning rules which took effect this year have effectively whetted buyers' appetite for shophouses in the infamous area.

According to JLL, there has been an increase in shophouse transactions in Geylang after parts of the area were re-zoned for commercial use.

“With the announcement of the rezoning of area bounded by Geylang Road, Lorong 22 Geylang, Guillemard Road and Lorong 4 Geylang, we have started to see an increase in interest and buying momentum for shophouses in the Geylang area, with 11 transactions this year to date in comparison to seven in 2014,” said Clemence Lee, Manager, Capital Markets, JLL.

JLL expects even greater demand for Geylang properties as the area enjoys spillover of commercial activities from neighbouring precincts.

A row of five adjoining 3-storey conservation shophouses have recently been put up for sale in Geylang with an indicative price of $28.8m.

"We also expect strong interest from investors such as private real estate funds, family funds and high-net-worth individuals (HNWIs) who are looking to purchase the property for investment purposes. Investors looking to value-add would be able to enhance the property by doing internal refurbishment works and by improving the existing tenant mix so as to increase the existing property yield,” Lee said.