Strata Offices Prices Fall 201 H O H 1H2024 Knight Frank
Knight Frank reports a 20.1% decrease in the average price of strata office spaces in 1H2024 compared to 2H2023, dropping from $2,740 psf to $2,190 psf. Despite this decline, the strata office market has remained relatively stable, with only a slight decrease in transaction volume from 156 transactions in 2H2023 to 154 transactions in 1H2024.
The top five largest transactions in the first half of the year were mainly from units at Vision Exchange and Suntec City. Vision Exchange took the top two spots, with the sale of a 14,015 sq ft unit and a 10,775 sq ft unit for $33.3 million and $25.7 million respectively. Suntec City followed with the sale of a 4,833 sq ft unit on the 36th floor and a 4,779 sq ft unit on the 22nd floor. The third-highest transaction in the first half of the year was the sale of a 2,325 sq ft unit at Connexion for $11.6 million, the highest recorded transaction for the development.
According to Knight Frank, the Downtown Core Planning Area attracted the most buyers in 1H2024, with 47 transactions totaling $190.1 million. This was supported by the sale of units in International Plaza and Solitaire on Cecil, the only new freehold strata office building in the Central Business District (CBD). However, Knight Frank believes that there were more strata office transactions in 1H2024 that were not accounted for as no caveats were lodged.
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The decrease in strata office prices in 1H2024 was driven by declines in both freehold and leasehold assets. However, the average price of freehold units had a slower rate of decline compared to leasehold units. The average price of freehold strata office spaces in 1H2024 dropped by 13.3% to $2,804 psf, while the average price of leasehold units fell 17.1% to $2,031 psf. There were 49 freehold deals done in 1H2024, compared to 42 in 2H2023, while the total sales value fell from $226.3 million to $115.4 million. In contrast, the total sales value of leasehold strata office units increased by 10.4% to $321.9 million, despite a slight decrease in the number of units sold.
Knight Frank notes that despite a lack of new inventory, strata office transaction volume has remained stable in the past 12 to 18 months. It anticipates that the launch of units at 108 Robinson Road and VisionCrest Orchard will support transactions in the coming months. Knight Frank expects the strata office market to achieve a total sales value of $1 billion for the whole of 2024.