Strata retail sales down 14.4% to $341.1m in 2019

The number of transactions was down to 203 caveats lodged.

The value of strata retail sales fell 14.4% YoY to $341.1m in 2019, despite the slight uptick seen in Q4 by 6.5% YoY, according to a Knight Frank report.

There were also 20.4% fewer strata retail transactions in 2019 with 203 caveats lodged compared to the 255 deals in 2018. Retailer and investor sentiments slid over the same period as well.

“Investors are likely to be interested in the units of strata-titled projects that have the potential for redevelopment or are available for a collective sale. However, there is a mismatch in price expectations between sellers and individual owners, making it difficult for an en bloc to go through,” said Mary Sai, Knight Frank’s executive director for investment & capital markets.

The number of freehold strata-titled retail property transactions in 2019 crashed 23% YoY to 107 deals, whilst the number of leasehold strata-titled retail transactions slipped 17.2% YoY to 96.

As for its value, leasehold strata-titled transactions hit $135.3m from $135.7m recorded in 2018. Likewise, the transaction value of freehold strata-titled properties was significantly lower at $205.8m in 2019 from $262.9m in the previous year.

In the same period, the average unit price of strata-titled retail units rose 4.4% YoY to $3,378 psf from $3,236 psf in 2018. This was partly attributed to smaller units being transacted.

In addition, the average size of these transacted retail units was 528 sqft, which is 3.6% lower than 548 sqft in 2018. The smallest average size was 392 sqft in Q4.

About 35.5% of the transactions lodged were for units priced between $1m to $2m, higher than the 30.2% recorded in 2018.

Some of the big-ticket item deals included the transfer of 313@ Somerset for $1b, Liang Court for $400m and The Star for $296m. Other notable transactions included the sale of units in Thong Teck Building and Lucky Plaza for $29.4m ($4,560 psf) and $11.5m ($7,368 psf), respectively.

“Given the headwinds faced by retailers, we anticipate interest in retail properties to be subdued. The spread of the Wuhan coronavirus is likely to impact retailers and Food & Beverage owners, which will further dampen the already weak strata retail market,” Sai concluded.

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