Singapore Strata Retail Market Faces Challenges in 1H2024: Knight Frank Report Reveals Declining Transactions and Prices

A Knight Frank analysis indicates that the stratum retail sector slumped significantly in the first half of 2024. While transaction volume dropped by 10.9% to 131 deals, total transaction value fell 32.1% from $317.2 million in the previous half-year. Average price of $2,190 psf dropped 20.1% alongside this fall. Most transactions took place at lesser quanta; 78.6% of deals came beneath $2 million. Following a $10.5 million sale in Lucky Plaza and a $10.4 million purchase in Peninsula Plaza, the biggest deal was for a unit in Royal Square at Novena.

With 27 and 24 sales respectively, the Rochor and Geylang Planning Areas turned up as the most sought-after sites for buyers. With 11 purchases valued at $11.3 million, Parklane Shopping Mall in Rochor experienced notable activity. With their average price keeping somewhat constant at $3,266 psf, freehold units showed greater resilience than leasehold homes; their price dropped steeper to $2,411 psf.

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Looking ahead, Knight Frank warns that a difficult climate is being created by growing operational costs in the retail and F&B industries. Low-footfall units could find it difficult to draw interest. Strata retail properties could still appeal to buyers looking for alternatives to conservation shophouses, though, and the possibility for group sales could improve the desirability of some of the units.

Recent, successful en bloc sales highlight this potential: Shenton House for $538 million and Delfi Orchard for $439 million. Knight Frank estimates that, despite the present downturn, the stratum retail market might reach a total sales value between $400 million and $500 million for the whole of 2024.

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