International School Condo Yields: Closer Is Not Always Better

Most landlords who search for a property to invest in typically focus their attention on areas with a large catchment of existing renters. In Singapore, the largest proportion of renters comes from professional expatriates who live and work here for prolonged periods of time.

Rental demand from these expats and their families has largely been consistent, and barring black swan events like the Covid-19 pandemic, is able to weather through most property market cycles. Purchasing a home here is often out of reach considering the steep 60% Additional Buyer’s Stamp Duty (ABSD) for foreigners purchasing residential property here.

Moreover, expatriate families with school-going children are also more likely to send their kids to international schools. As a result, small communities of foreigners have emerged in the areas around most international schools.

Broadly speaking, proximity to an international school – or any educational institution for that matter – contributes positively to average property values in that area. Last year we took a broad look at some of the well-known international schools and the condos with the best average yields back then.

Living close to, or even at the doorstep, of schools has long been a desirable attribute for many families, especially if we’re talking about avoiding traffic jams in the morning and for families with parents who teach or work at the schools that their kids go to.

In this article, we’re taking an even closer look at some of the best performing condos around recognisable international schools in Singapore.

We compared the median resale prices of condos against their median rents to compute the rental yields of condos that sit close to five major international schools. Then, we split the list into projects which are less than a kilometre away from, and those between 1 and 2 kilometres, of the international school campuses.

Overall, we saw a slight increase in rental yields for condos that are less than a kilometre away from an international school, compared to condos which are between 1 – 2km away. But the influence this had on yields was rather small.

But the data compiled by Stacked does show that most condos close to international schools tend to reap healthy yields in these areas, which suggests that they benefit from healthy leasing  demand and low vacancy rates – all important factors for landlords looking to maximise their real estate assets.

Besides this, our analysis did point out a standout winner, as well as a series of other unexpected bright spots.

The most central and established cluster of international schools in Singapore

The Dover campus of the United World College (UWC) of Southeast Asia, as well as the British-based Tanglin Trust School, are reasonably close by in the Dover/one-north precinct. This part of Singapore is characterised as a major education and business park corridor, and other schools in the area include Anglo-Chinese School (Independent) and National University of Singapore (NUS) College.

At the moment, the Dover/one-north area is not predominantly residential in nature, so there are fewer examples of condos within walking distance of UWC Dover and Tanglin Trust. In fact, we were only able to find one private residential development that sits less than a kilometre from these two schools.

United World College – Dover

We’ll briefly touch on this campus because UWC Dover is set to relocate to Tengah in 2032. 

Overall, condos close to UWC Dover posted reasonably strong rental yields. For condos between one and two kilometers from the school, two-bedroom units posted a median yield of 3.25%, while three-bedroom units posted a median yield of 2.87%.

Two-Bedroom Yields Near UWC Dover

Three-Bedroom Yields Near UWC Dover

By and large, the strongest yields were two-bedroom units in West Bay Condominium, which fetch a median monthly rent of $3,800 that results in most landlords reaping a net yield of 3.98%. Likewise, the three-bedroom units in Blue Horizon also stood out with a median monthly rent of $5,500, and a net yield of 3.53%.

However, this calculus will change when the campus relocates to Tengah in 2032, and marks the end of UWC’s existing lease at the Dover site. The land will then be returned to the Singapore Land Authority. The existing Dover campus is the school’s largest in Singapore, with over 3,000 students spread out across the 11ha site.

Tanglin Trust School

The British-based Tanglin Trust School is more firmly within the one-north precinct, but is less than three kilometers from UWC Dover. Established in 1925, Tanglin Trust is also the oldest international school in Singapore.

One-north has grown its reputation as a key commercial and business precinct for a range of industries, from media and technology companies, to biomedical and advanced computing. Some of the landmark business parks there include Fusionopolis and the Mediacorp Campus at Mediapolis.

According to the data compiled by Stacked, the rental figures were broadly in line with the condos around UWC Dover, with two-bedroom units doing slightly better compared to three-bedroom units.

Two-Bedroom Yields Near Tanglin Trust 

Three-Bedroom Yields Near Tanglin Trust 

Capitalising on the growth of the one-north Corridor

While we were consolidating the data for these two regional clusters, Dover and one-north, we picked up on a trend that should catch the eye of interested investors. Essentially, capitalising on the proximity to both international schools, as well as gaining exposure to white-collar and professional tenants employed at the companies in one-north.

Rochester Residences and Dover Parkview are within 2km of both schools, with Dover Parkview being within a kilometer from UWC Dover, and Rochester Residences within a kilometer from Tanglin Trust.

We found that resale prices at Rochester Residences commanded some of the highest rates among all of the condos we surveyed in this article; with resale units fetching a median price of $2.87 million but most rental units there going at a monthly median rent of $6,500 for a two-bedroom unit, and $9,000 for a three-bedroom unit.

The combination of price and rent at both of these developments results in the higher end of yields compared to other nearby condos in the area, with most landlords at Rochester Residences reaping a net yield of 3.21% and landlords at Dover Parkview seeing a net yield of 3.29%.

A note on one-bedroom units

Overall, we usually see that one-bedroom units tend to record higher rental yields compared to two- or three-bedroom units. But this is largely attributed to the fact that the yield to quantum ratio decreases with square footage.

And we observed this trend hold throughout all but one of the condos close to international schools. While two- and three-bedroom units in condos near Tanglin Trust and UWC Dover recorded median net yields of 2.9% to 3.3%, one-bedroom units took home net yields of 3.9% to 4.4%.

When it comes to expat families who send their children to international schools in Singapore, we still expect two- and three-bedroom units to be the preferred unit type, since those units offer the best balance of liveability, space, and affordability.

There was one international school which had a strong enough demand to buck this trend. That was the Singapore American School, where the two- and three-bedroom units at condos around it posted yields between 3.5% and 4.9%, respectively – and higher than their one-bedroom counterparts.

Meaningful returns in the North

We also wanted to examine if condos at the doorstep of international schools are able to command premium rents compared to those slightly further away. And we found this to be true for the developments neighbouring the Singapore American School (SAS).

Located at Woodlands Street 41, close to the Marsiling neighbourhood, SAS was founded in 1956 and its 1.5ha campus accommodates over 4,000 students. The land is on a 90-year lease and the existing campus was developed at the cost of $150 million, and welcomed its first students in 1996.

Two- and three-bedroom condo units that are sited within a kilometer of the school recorded exceptionally strong rental returns of 4.84% and 4.86%, respectively. On the other hand, developments beyond this distance posted net rental yield of about 3.57% for both unit types.

However, we caveat this by stating that we were only able to reasonably rely on transaction data from two private residential developments close to SAS.

Two-bedroom yields near SAS

Three-bedroom yields near SAS 

Our initial suspicion is that this is an effect of the school itself, especially because it has the largest AP programme in the world outside of the US. But we believe that it might have more to do with the geography of the area, with the school being a key rental demand driver in a neighbourhood that is otherwise far from the central region.

The neighbourhood around the school does tend to give off a uniquely American feel that is not found elsewhere in Singapore, based on a handful of visits I’ve taken there.

This disparity in terms of net rental yield could even come down to the topography of the neighbourhood. The school sits at the edge of the neighborhood, bound by Seletar Expressway and Bukit Timah Expressway. The relative scarcity of available homes in this area contributes to the high competition for rental homes there.

The two-bedroom units at The Woodgrove recorded the highest rental yield of 4.84% within the two-bedroom segment, while the three-bedroom units in Woodgrove Condominium took the top spot among the three-bedders. The neighbouring developments are within 1km of SAS, which explains the razor-thin difference.

Rental yields around other international schools were much less pronounced

Over in the West is Dulwich College which is found in Bukit Batok. But the condos surrounding it barely posted any difference in yields – particularly the condos less than a kilometer away from the school, and those that are between two and three kilometers away.

Dulwich College, the British school founded in 2014, has improved its reputation in recent years, according to anecdotal reports from the expat community in Singapore. It’s unique because the British-based school has a sole IB Diploma focus and does not offer A levels, unlike others like Tanglin Trust.

Two-bedroom yields near Dulwich College

Three-bedroom yields near Dulwich College

Overall, we noted that the highest rental yields for each unit type were developments that are further than a kilometer from the school. The two-bedders at Regent Heights command a median monthly rent of $3,650 and a net rental yield of 3.84%, while the two-bedders at Westmere lease for around $4,500 per month and rake in a net rental yield of 3.86%.

In this neighborhood, there was also no significant difference between the net yield of two- and three-bedroom units, for condos close to Dulwich College.

Condos around other international schools didn’t see that much more appealing yields at all

The Stamford American International School, close to Woodleigh MRT station on the North-East Line, is one of the international schools that seem to have a marginal impact on rents among nearby condos.

Based on the data compiled by Stacked, condos close to the school posted the lowest two- and three-bedroom yields among the entire dataset. This ranged from 2.95% to 3.00% for two-bedroom units, and 2.66% to 2.88% for three-bedroom units.

This is despite apparently positive locational attributes, such as proximity to Woodleigh Mall, neighbourhood amenities, and public transport options. Two of the projects in this area are either linked to MRT stations or right beside them – namely, The Woodleigh Residences and Poiz Residences.

Among all of the three-bedroom rental yields that we consolidated here, The Poiz stood out amongst the other nearby developments, posting a net rental yield of 3.28% – against the others which were largely less than 3%. The median monthly rent for a three-bedroom unit at The Poiz was $6,100.

Three-bedroom yields near Stamford American International School 

We also took a look into whether the relocation of an international school improves the rental yields of surrounding condos.

Both the German European School Singapore and Overseas Family School relocated their campuses in the last 10 years. 

The German School relocated from Bukit Timah to Bukit Panjang in 2018. We saw rents for two- and three-bedroom units within a two kilometer radius from the school begin to climb after the school’s relocation, compared to before.

In the years leading up to the relocation, rents held steady across most of the developments. Resale prices began to rise year on year after 2018 for a period of about four years, as the market began to price in the school’s proximity.

2-bedroom units

3-bedroom units

Overall, the trajectory of yields reflected this rental growth. But we also can’t discount the impact of nearby developments too: for example, the three-bedroom rents in Glendale Park, Hillview Park, and The Dairy Farm rose between 2018 and 2021, while the available yields remained below pre-relocation levels. This could be due to purchase prices rising just as quickly as rental prices in those developments.

Furthermore, we saw the sharpest rental growth in 2022 and 2023, but this was due to islandwide increases in the rental market, and cannot be attributed directly to the opening of the new campus in the neighborhood.

2-bedroom units

3-bedroom units

Broadly speaking, we saw similar rental and yield trends taking shape in the condos around the new Overseas Family School. That international school relocated from Orchard to Pasir Ris in 2015.

Conclusion

In general, rental yields for condos close to most international schools in Singapore have benefitted from the proximity. We saw rental yields largely over 3% in most cases, which is already considered relatively high among the average rental property in Singapore.

We also deduced that rentability is strong among the condos around these schools, and for landlords – being able to fill your units with tenants, while avoiding months where your condo sits empty – is half the battle won.

But we also conclude that in most areas where a sizeable proportion of rental demand is anchored by an international school, a condo less than one kilometer away from the school was not likely to have outsized returns compared to those just over a kilometer from the school.

Proximity to an international school was not enough to overwrite the overarching rental effect we see across Singapore, where one-bedroom condos usually offer stronger yields than two- or three-bedroom units because of their smaller absolute quantum. But of course, tenants of one-bedroom condos are less likely to be school going families.

Thus, investing in a property close to an international school gives you good protection against all but the most severe up-and-down cycles in the residential market, since demand in these areas is usually stable and consistent.

But we wouldn’t look too much into just how close the condo is, as long as it’s accessible and convenient to the school. That’s unless you are planning to buy in Woodlands, to target the SAS-going family. Instead, getting a good deal for a good product that will attract these families, will attract the right tenants.