Surprisingly, MRT proximity doesn’t work wonders for rental yields

More inaccessible projects have higher yields.

Residential developments that are close to MRT stations typically command higher sales prices, but a report by OrangeTee revealed that MRT proximity doesn’t work magic for rental yields.

OrangeTee compiled a list of 34 projects with rental yields above 4%. Surprisingly, 20 out of 34 projects are not within walking distance from a MRT station, defined as a distance under 400m.

“This is understandable because projects located near to MRT stations command a price premium over projects located further away. Tenants would be willing to pay a premium for convenient locations. However, there may be differences in rental and sale premiums,” the report said.

“This would explain why projects that are relatively inaccessible are still able to command high rental yields. Based on our analysis, it seems that high rental yielding projects may not necessarily be located near an MRT station,” OrangeTee added.  

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