Office Mortgagee Listings

Singapore Sees Uptick In Office Mortgagee Listings In Q1

SINGAPORE – The number of mortgagee listings, or properties repossessed by banks and put up for auction, increased during the 1st three months of the year, with more distressed sales expected in H2 2023 as bankruptcy applications rise, reported The Business Times on Monday evening (24 April, SGT).

Based on data from Singapore’s Ministry of Law, the number of bankruptcy applications increased by 5.6 percent to 959 during Q1 2023 on a quarterly basis, but it’s up 22.2 percent year-on-year.

Knight Frank and Edmund Tie, which auction off properties on behalf of banks and other clients each month, revealed that there were more mortgagee listings in the 1st quarter of the year.

For Knight Frank, the number of mortgagee listings rose to 32 in Q1 2023 from 10 in the preceding quarter. In particular, office mortgagee listings rose from zero to three over the period. The real estate consultancy attributed the overall increase in mortgagee listings to rising interest rates and a more difficult business climate, which has made business operations harder.

Of the 32 mortgagee listings, 6 properties were successfully auctioned off at a discount or sold near their opening price. Only one, an office unit at Paya Lebar Square, was sold at 1.8 percent higher than the opening bid of S$1 million, at S$1.1 million.

Meanwhile, Edmund Tie’s mortgagee listings almost doubled from 15 in Q4 2022 to 28 during the 1st three months of the year. Specifically, the number of office mortgagee listings rose to 5 in Q1 2023 from zero in the prior quarter and just 5 for the whole of 2022.

Interestingly, an office unit in Paya Lebar measuring 506 sq ft was snapped up for S$1.1 million.

Joy Tan, the Head of auction and sales at Edmund Tie shared that most buyers have adopted a wait-and-see approach amidst the high interest rates.

“Hence, activities in the auction market are expected to only pick up pace in the second half of the year, when buyers and sellers adjust their expectations accordingly, following a clearer sense of the market.”

Furthermore, Knight Frank’s Q1 stated that more entrepreneurs could face difficulties in keeping their businesses afloat. The property consultancy also expects to see more mortgagee listings by H2 2023 “especially for workplace properties”.

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