Strata office sales smash 1995 record

The average transacted unit price was a 56% increase from 1H11.

In a release by Knight Frank, a total of 632 strata offices have been transacted in 1H/2012, a record high since 1995. This was largely driven by sales in the primary market making up 72% of all transactions. Primary market sales transaction in 1H/2012 amounting to $814.9 million was a nineteen-fold increase from 1H/2011.

The average transacted unit price of $2,129psf in 1H/2012 was a 56% increase from 1H/2011. This was mainly attributed by an increased number of new strata office projects in the Central Business District (CBD), and the availability of smaller-sized office units with lower price quantum that contributed to higher unit rates.

Here's more from Knight Frank:

Developments in the CBD such as Oxley Tower, 100PS and EON Shenton formed the bulk of primary market sales, with the remaining transactions from the suburban areas (Centropod @ Changi and Paya Lebar Square). In 1H/2012, units in the CBD transacted at an average price of $2,950psf (39% higher than 1H/2011), while units in the suburban area are transacted at an average price of $1,740psf, up by 32% compared to 1H/2011.

The weakening office rentals and increasing shadow space in the office sector have impacted the strata office secondary market, having seen a 24% decrease in sales activity as compared with 1H/2011, and average unit prices trending lower at $1,706psf. The larger-sized office units with higher price quantum in the secondary market (average size of transacted units at 2,190 sq ft compared with 910 sq ft in the primary market in 1H/2012), saw lower number of transactions as they were out of reach for prospective office buyers especially those with tighter budgets.