Chart of the day: Transaction volume of strata offices falls by 15.7% for H1 2022

The 145 units sold totaled $365.1m.

This chart from Knight Frank shows the transaction volume and average prices of strata office units, with transaction volume declining by 15.7% in H1 2022 from the previous half-year.

A total of 145 strata offices amounting to $365.1m were transacted in H1 2022, a decline from the 172 units worth $461.9m in H2 2022. Knight Frank attributed the slowdown in sales activity to the shrinking saleable stock of strata offices.

“With the recent successful collective sale of a few strata commercial buildings, existing owners of other strata buildings may be holding on to their units in hopes of also embarking on the enbloc route,” Knight Frank said.

Knight Frank predicts that investors with a view towards capital gains might also tap into the market for the enbloc potential of strata offices. 

Meanwhile, the Downtown Core Planning Area recorded the largest volume of sales in H1 2022, with 45 units sold. Most of these transactions were strata offices in older buildings that possess enbloc potential or have been launched for a collective sale, with High Street Centre and Shenton House recording a combined total of nine transactions in H1, signalling the ongoing interest among investors for this asset class.

Knight Frank said that whilst demand for strata office units shrunk in the first six months of the year against the volume of sales in H2 2021, there is sufficient interest in the asset class given the enbloc potential of some developments, particularly those in older buildings or others that have launched the collective sale process. Other strata office units in the market that are conveniently located, modern and well-maintained also present opportunities for investors who might want to own quality office space in close proximity to amenities.

“With no immediate supply of new upcoming strata offices in the pipeline and with buyers not subject to Additional Buyer’s Stamp Duty and Seller’s Stamp Duty , continued demand for strata offices is expected in the remaining half of the year. Total transactions in the whole of 2022 could hover within the range of $600m to $700m,” Knight Frank added.

In 2021, the strata commercial market showed record-breaking numbers with strata office transaction volume increasing by 56.8% YoY.