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The single-bulk-buyer transaction at Centrium Square significantly boosted the total transaction value of strata-titled retail units, rising 19.9 percent to S$239.6 million in 1H 2016 compared to 2H 2015, according to Knight Frank.
Citing government data, the Knight Frank report said the number of caveats lodged jumped 15.9 percent in 1H 2016 previous half-year period.
According to Knight Frank, a total of 32 caveats registered were for Centrium Square, which is understood to be lodged by Canali Logistics and amounting to S$70.1 million in transaction value.
This effectively pushed average price for new sale freehold strata retail units up by 32.6 percent to S$3,741 per sq ft, while the total number of caveats lodged surged 263 percent in 1H 2016 compared to 2H 2015.
Average price and transaction volume for freehold resale strata retail units, on the other hand, remained stable.
Given the limited new launches, demand for new sale leasehold strata retail units fell 69.0 percent to nine caveats in 1H 2016. With this, average prices rebounded to S$3,903 per sq ft after dropping in 2H 2015.
Knight Frank noted that demand for leasehold resale strata retail units declined by 17.9 percent to 23 caveats in 1H 2016, while average price contracted by 3.6 percent.
Looking ahead, the research firm expects the availability of good quality spaces in landlord-owned malls to pose a threat to the occupancy of strata retail units.
“Rental yields could also fall, as the overall retail market softens,” it said.
As such, total transaction performance for 2H 2016 “is expected to be similar to that seen since 1H 2015, at between 100 and 120 units per half-year, as no significant change in buyer sentiment is expected.”
Nonetheless, Knight Frank expects freehold strata retail spaces in good locations to remain highly sought after due to their scarcity.
Nikki De Guzman, Editor at CommercialGuru, edited this story. To contact her about this or other stories email nikki@propertyguru.com.sg