Singapore Strata Office Sales Hit S$691.5mil In H1 2021
SINGAPORE – Strata office sales in the city-state during the first half of the year totalled S$691.5 million, exceeding prior half-yearly transaction values below S$600.0 million since H1 2015, according to a newly published report from Knight Frank.
By number, 162 strata office units changed hands in H1 2021, up 20.9 percent from 134 during the second half of last year. It is also significantly higher than the 79 recorded in H2 2020. Notably, the tally excludes the en bloc sale of Maxwell House.
Knight Frank said sales volume of strata office space was boosted by “cautious optimism on Singapore’s growth outlook, as well as investor interest in possible strata office buildings collective sales and from owner-occupiers.”
The real estate consultancy revealed that Singapore saw 81 strata office units sold for a total of S$454.0 million in Q2 2021. While the same number of strata office units were sold during the first half of the year, the overall sales value was merely S$237.5 million. One reason for the disparity is that of the top 5 strata office deals by selling price in H1 2021, 4 were transacted in Q2 2021.
Knight Frank said “the top sale in terms of transaction quantum was in Samsung Hub, where the ninth floor (#9-01/02/03/04) was bought by property and construction group Lee Kim Tah for S$53.1 million or S$4,050 psf.”
“An example of demand from enterprises warming up to the idea of sizable owner-occupied strata offices, Lee Kim Tah is expected to occupy part of the strata office floor when Certis Cisco Centre, where they currently lease, undergoes redevelopment.”
Moreover, the property consultancy shared that opportunistic buyers might have been enticed by the en bloc potential of some strata office buildings that are ripe for redevelopment. For example, Maxwell House was sold via en bloc sale in May 2021 for S$276.8 million, which is above the property’s most recent asking price. Before the collective sale, a strata office unit there was purchased in March 2021 for S$470,000, representing a 75.1 percent appreciation from its prior transacted price over 10 years ago.
By area, District 1 accounted for nearly 30 percent of overall sales volume, as most of the strata office stock (about over 55 percent) is in Singapore’s Central Business District (CBD), which consists of the Orchard and Downtown Core and planning areas. In particular, The Central in Eu Tong Sen Street witnessed 12 deals during the first half of the year totalling S$67.7 million.
The property consultancy also revealed that overall transactions of freehold strata office units sharply increased by 108.6 percent to S$187.1 million in H1 2021 compared to the prior 6-month period. Over the same period, total sale of leasehold strata office units surged by more than 2-fold to S$504.4 million from S$245.0 million. Among the leasehold developments, Paya Lebar Square unloaded a notable 15 units of strata office space for S$55.6 million.
“The average unit prices for both freehold and leasehold strata offices also increased in H1 2021. Freehold strata offices recorded a 19.4 percent increase in unit price from S$2,153 psf in H2 2020 to S$2,571 psf in H1 2021. Likewise, average unit prices for leasehold strata offices jumped by 10.9 percent from S$2,117 psf to S$2,347 psf within the same period,” added Knight Frank.