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The third quarter of 2015 saw more office units, shops and shophouses being sold via auction, showed a Knight Frank report.
The number of office units that went under the hammer jumped from four in Q2 to 15 in the last three months. This comes after 10 office units in Peninsula Plaza were placed on the block.
However, all such units were not sold during the auction. Knight Frank attributed the weak take-up to “the slowdown in the office leasing market with declining office rents and the influx of large upcoming office supply in 2016.”
Meanwhile, the number of shops and shophouses offered for auction soared from 24 in Q2 to 48 in Q3.
“Two adjoining shop units and a shophouse were sold for S$12.8 million; a better success rate compared to the previous quarter when no shops or shophouses were sold,” it said.
Over in the industrial property sector, the number of industrial properties put up for auction dropped from 41 in the second quarter to 32 in the third quarter of the year.
Eight of the 32 industrial properties were put up for auction under mortgagee sale, up from the six properties registered in Q2.
Knight Frank revealed that only one industrial property found buyers during the auction, down from two in the previous quarter.
“The sold unit was a strata-titled factory unit in freehold Poh Leng Building along Moonstone Lane. The unit fetched S$1.21 million; slightly above its opening price of S$1.2 million.”
Looking ahead, Knight Frank expects the industrial sector to witness an increase in the number of properties put up for auction.
“In recent years, many investors bought strata-units of factory space, but may be having difficulties in securing tenants in the face of economic headwinds. This could result in some of them being unable to service their mortgage loans,” it said.
Nikki De Guzman, Editor at CommercialGuru, wrote this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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