_Strata Commercial Market Update H1 2023
Interest in the strata commercial market remains stable despite economic headwinds. With the recent property cooling measures and amendment in the Residential Property Act, some focus will be channelled to investible strata commercial units.
August 02, 2023
Highlights
- The strata office market slowed down in H1 2023 compared to H2 2022, with 149 transactions that translated to S$652.9 million, a 19.8% drop from the S$814.1 million sales in H2 2022 when 160 transactions were recorded.
- The Downtown Core Planning Area recorded a total sales value of S$521.5 million with 61 units sold, mainly consisting of strata office units at Solitaire on Cecil.
- Out of the 149 transactions in H1 2023, 61.7% or 92 were leasehold properties, amounting to S$267.7 million.
- In H1 2023, 57 transactions that totalled S$385.2 million were recorded for freehold properties, an increase against H2 2022 when 48 transactions were registered with a total sales value of S$322.3 million.
- Freehold strata office units remain in high demand, as local businesses and foreign private wealth investors acquire these units as a hedge against rental cycles, for the operational flexibility, for capital preservation and subsequent appreciation.
- Buyers/investors also show a strong preference for quality strata offices in locations that have convenient access to MRT stations.
- Headwinds such as the labour crunch in the service industries, rising business costs and interest rates in the retail sector, led to a quieter strata retail market.
- Buyer/investor interest in strata retail units is expected to remain stable despite the higher interest in shophouses and strata office units, as this is a rather niche asset class.
- As the retail sector continues to navigate its way to recovery amid the current market headwinds alongside the aftereffects of the pandemic, a projected total sales value between S$400 million and S$500 million can be expected for the whole of 2023.
Read the full report here.
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