2025-02-10-莱坊-Worker_Dormitories_in_Singapore_H2_2024_4页_15mb

Summary of Worker Dormitories in Singapore H2 2024

Core Content

Singapore's worker dormitory sector is a critical component of the country's housing and labor market, especially for the Construction, Marine Shipyard and Process (CMP) industries. These dormitories have evolved significantly from temporary and poorly regulated structures to purpose-built, well-managed facilities that provide basic amenities and services for migrant workers. The sector is now regulated under the Foreign Employee Dormitories Act (FEDA), which aims to ensure safe, comfortable, and hygienic living conditions for foreign workers.

Main Points

1. Foreign Worker Population

• As of June 2024, there were 442,900 work permit holders in the CMP industries.
• The population has grown by 24.5% since December 2018, despite the pandemic's impact.
• Post-pandemic, the return of international borders has led to increased demand for foreign labor.

2. Stock of Worker Dormitories

• There are 1,441 dormitories in Singapore with a total of 439,198 beds as of December 2024.
• Class 4 dormitories (1,000 or more beds) account for 63.3% of the total market.
• New dormitory developments are expected to be completed, including a 1,650-bed dormitory by Centurion Corporation in Ubi.

3. Upcoming Supply

• The Dormitory Transition Scheme (DTS) and New Dormitory Standards (NDS) are expected to reduce the total inventory of beds.
• Existing dormitories will need to be refurbished by 2030 and 2040, leading to a reduction in beds per room.
• MOM is set to launch two new dormitories: one in Tukang Innovation Lane (2,400 beds) by early 2026, and another in Sengkang (7,200 beds) by 2028.

4. Demand and Occupancy

• Demand remains strong, with most CMP industries planning to expand their workforce.
• Occupancy rates have recovered significantly post-pandemic:
  • 73.7% in H2 2020 (lowest point)
  • 79.1% in H2 2021
  • 98.8% in H2 2022
  • 96.7% in H2 2024
• East and West zones have maintained near-full occupancy since H2 2022.
• Central zone saw a slight dip to 93.0% in H2 2024 from 98.1% in H1 2024.

5. Rents

• Average monthly rents for a bed in commercial dormitories range from S$390 to S$510.
• Islandwide average in H2 2024 was S$460 per bed per month.
• Rents surged to S$415 pb pm in H2 2023 (up 36.1% y-o-y) and S$460 pb pm in H2 2024 (up 10.8% y-o-y).
• Central zone had the highest rents at S$510 pb pm, while the West zone had the lowest at S$390 pb pm.

6. Investment Transactions

• Despite the niche nature of the market, investment sales have increased in 2024 due to strong demand and rising rents.
• Homestay Lodge was sold for S$63.5 million in June 2024.
• Bain Capital is nearing a deal to acquire Avery Lodge for S$750 million.

7. Outlook

• With ongoing infrastructure and manufacturing projects, demand for foreign workers will continue.
• Bed rents are expected to rise in 2025, with an anticipated increase of 5% to 8%.
• Yields for PBDs are expected to remain high due to the imbalance between demand and supply.
• Rent increases are likely to moderate in 2025 as the CMP industries normalize.

Key Information

• FEDA (Foreign Employee Dormitories Act): Enacted in 2015, it regulates dormitory conditions and promotes the dignity and safety of migrant workers.
• Classes of Dormitories:
  • Class 1: 7–99 beds (35,814 beds, 950 dorms)
  • Class 2: 100–299 beds (47,779 beds, 263 dorms)
  • Class 3: 300–999 beds (77,472 beds, 168 dorms)
  • Class 4: 1,000 or more beds (278,133 beds, 60 dorms)
• New Dormitory Standards (NDS): Expected to improve living conditions and reduce bed density, potentially impacting the overall supply and demand dynamics.

Conclusion

Singapore's worker dormitory sector is a vital and evolving part of the real estate market, driven by the need for foreign labor in key industries. The sector has seen a significant transformation in living standards, regulatory oversight, and economic performance. With the introduction of new standards and the gradual normalization of the CMP industries, the market is expected to stabilize, with continued demand and moderate rent increases.