2024-02-05-莱坊-Singapore_Strata_Commercial_Market_Update_H2_2023_3页_1020kb

Strata Commercial Market Summary (H2 2023)

Core Content

This summary outlines the performance and outlook of the strata commercial market in Singapore, focusing on strata office and strata retail segments for the second half of 2023 (H2 2023) and projecting trends for 2024.

Main Points

1. Strata Office Market Performance

• Total 2023 Sales Volume: S$1.2 billion, aligning with the projected range of S$1.1 billion to S$1.2 billion.
• Year-on-Year Growth: 1.8% increase in total transacted value from 2022.
• Average Unit Price: Rose to S$2,929 psf in 2023 from S$2,740 psf in H2 2023.
• H2 2023 Performance:
  • Total Transacted Value: S$518.0 million.
  • Number of Transactions: 156.
  • Average Unit Price: S$2,740 psf.
  • Downtown Core Planning Area: Recorded the highest sales value in H2 2023 at S$328.7 million, driven by sales at Suntec City and International Plaza.
  • Solitaire on Cecil: Dominated the top five transactions with two major sales, contributing significantly to demand.
• Market Outlook for 2024:
  • Expected to see a surge in demand as occupiers from Far East Shopping Centre and Shenton House, after successful collective sales, seek new office space.
  • Potential for more en bloc sales in older buildings due to sustainability pressures.
  • Boutique office buildings may stratify and launch refurbished units to meet demand.
  • Projected total transaction value: S$1.0 billion for 2024, despite 1.8 million sf of new CBD office supply.

2. Strata Retail Market Performance

• Total 2023 Sales Volume: S$496.3 million, with 259 units sold.
  • This is a 27.3% increase in average unit price from 2022 (S$2,241 psf to S$2,854 psf).
• H2 2023 Performance:
  • Total Transacted Value: S$309.0 million.
  • Number of Transactions: 143.
  • Average Unit Price: S$3,160 psf.
  • Top Sales Areas:
    • Orchard Planning Area: Top sales value with 18 units sold for S$64.2 million.
    • Novena Planning Area: Second highest with 18 units sold for S$57.5 million.
    • Downtown Core Planning Area: Third with 19 units sold for S$52.6 million.
  • Notable Transactions:
    • Four freehold units at 15 Scotts Road sold for S$31.1 million in July.
    • One unit at 26C Lorong Mambong sold for S$14.1 million in August.
    • One unit at Oxley Tower sold for S$11.0 million in November.
• Market Outlook for 2024:
  • Buyer/investor interest is expected to remain stable as more people return to the office.
  • Displaced retailers and F&B outlets from Far East Shopping Centre and Shenton House will seek new retail spaces.
  • Retail entrepreneurs with seed financing may increase demand for strata retail units.
  • Projected total sales value: Between S$400 million and S$500 million for 2024.

Key Information

Strata Office Market Comparison (Freehold vs. Leasehold)

• Freehold Sales (H2 2023):
  • 42 transactions totaling S$226.3 million.
  • Average unit price: S$3,235 psf.
  • 41.4% decrease in transactions and 27.6% decrease in total value compared to H1 2023.
• Leasehold Sales (H2 2023):
  • 114 transactions totaling S$291.7 million.
  • Average unit price: S$2,448 psf.
  • 7.8% increase in transaction volume and 1.6% decrease in average price compared to H1 2023.

Strata Retail Market Comparison (Freehold vs. Leasehold)

• Freehold Sales (2023):
  • 136 units sold for S$268.0 million.
  • Average unit price: S$2,848 psf.
  • H2 2023: 76 units sold for S$166.3 million at an average of S$3,246 psf.
• Leasehold Sales (2023):
  • 123 units sold for S$228.3 million.
  • Average unit price: S$2,861 psf.
  • H2 2023: 67 units sold for S$142.8 million, reflecting a 19.6% and 66.9% increase in volume and value compared to H1 2023.
  • Average price rose 19.2% from S$2,573 psf in H1 2023 to S$3,067 psf in H2 2023.

Summary of Market Outlook

• Strata Office: Expected to see increased demand in 2024 due to displacement from Far East Shopping Centre and Shenton House, as well as potential en bloc sales and new product launches.
• Strata Retail: Likely to remain stable with continued retail recovery, supported by returning office traffic and entrepreneurial activity.
• Projected 2024 Sales:
  • Strata Office: S$1.0 billion.
  • Strata Retail: Between S$400 million and S$500 million.

Contact Information

For strata commercial inquiries, please contact:

• Mary Sai
  Executive Director, Capital Markets
  Email: mary.sai@sg.knightfrank.com
  Phone: +65 6228 6886

For further information on the report, please contact:

• Leonard Tay
  Head of Research
  Email: leonard.tay@sg.knightfrank.com
  Phone: +65 6228 6854

• Sim Li Wei
  Research Analyst
  Email: liwei.sim@sg.knightfrank.com
  Phone: +65 6228 6856