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Total transaction volume of strata-titled offices in Singapore increased 22.8 percent to 248 transactions in 1H 2014 from 202 transactions in 2H 2013, revealed a Knight Frank report.
Notably, leasehold offices accounted for the bulk of the sales, with 71.8 percent share or 178 transactions.
Main contributors of leasehold strata-titled office transactions are International Plaza, Vision Exchange (pictured) and Prudential Tower, while transactions of freehold properties primarily came from ARC 380 and Hexacube.
Knight Frank expects the strata-titled office market to hold steadily over the next few quarters, on the back of healthy rental growth and limited supply of well-located strata offices available for sale.
Meanwhile, sales volume of strata-titled retail property plunged 68 percent to 124 transactions in 1H 2014 from 388 transactions in 2H 2013.
According to Mary Sai, Executive Director & Head of Commercial Sales at Knight Frank, “Sentiment in the strata-titled retail market has been adversely affected by the TDSR ruling, rising operating costs due to the tight labour supply conditions, and growing competition from online retailing.”
The report also noted that the transaction volume of shophouses declined further in 1H 2014, totalling 40 transactions compared to 49 transactions in 2H 2013.
Looking ahead, Knight Franks expects demand for shophouses and strata-titled retail properties to remain low at least for the second half this year, due to the compressed yields and current mismatch between buyers’ bids and sellers’ asking prices.
Prices of shophouses are expected to see a decline of 10 to 15 percent in the next six to eight months, while the strata-titled retail market is expected to see some price correction by the end of the year with about 10 to 20 percent price fall, it said.
Nikki De Guzman, Editor at CommercialGuru, wrote this story. To contact her about this and other stories, email nikki@propertyguru.com.sg
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