Red light areas may have an unsavoury reputation in many cities, but sex shops, dingy clubs and dodgy goings-on seem to be a draw for property investors.
The club where infamous drinker Oliver Reed propped up the bar and Breakfast At Tiffany’s star Audrey Hepburn danced until dawn has just changed hands in London – less than three months after agents listed the sale.
Celebrity links is part of the notoriety enjoyed by the legendary Kingly Club, nestling in the dark Soho back streets behind Regent Street.
Fifty years ago, The Kingly was the place where call girl Christine Keeler draped herself over a chair for minister John Profumo in the political scandal that rocked the sixties.
Soho to Singapore
The lease complete with a 3am licence costs £52,500. The Kingly, formerly known as The Pinstripe Club, is now part of the portfolio of clubber and restaurateur Patrice Gouly, who has links with nightspots like China White and Raffles.
On the other side of the world, Geylang, Singapore, also has a red light reputation.
The streets are lined with seedy hotels renting rooms by the hour, and the crowded footpaths are busier late at night than during the day.
Despite the shady nightlife, Singapore agents Streetsine are selling Geylang as one of the city state’s prime investment areas. Property prices are low, but rents are high – and the neighbourhood returns the best yields in the city.
Cheap prices and high rents
Condos range from US$465,852 to US$602,390 – which translates in to cost per square foot as US$467.
That kind of money will not buy a condo anywhere else in Singapore – and, says Streetsine, the last sold price for a condo was US$481,969, which gives a monthly mortgage of US$1,425, assuming interest at 2% over 30 years.
The average rent for similar homes in Singapore is US$2,411, leaving a good profit for most landlords, depending on expenses.
The latest Urban Redevelopment Authority (URA) index rates Geylang with the best performing rental index in the second quarter of 2012, up 0.7%, while condos in other districts barely managed 0.3%.
Get ready for gentrification
Planners have released details of a new blueprint for the district aimed at replacing the rough and ready red light image with bustling offices and shops.
The developers will not strip the heart out of Geylang, the district is also well-known for offering a wide variety of food and fruit stalls round-the-clock at more than reasonable prices.
Altogether, the prospects for buying condos at a low price ready for the gentrification of the neighbourhood look bright for property investors.