Sales of strata-titled retail units hit by curbs PUBLISHED ON JAN 7, 2015 1:22 AM BY JACQUELINE WOO SALES of strata-titled retail units plunged last year as tough lending curbs took effect, a new report showed yesterday. Only 453 sales caveats were lodged in 2014 - 61 per cent down from the 1,163 registered in 2013. Investor demand for such strata-titled outlets is likely to stay weak this year, added the report, due to the continued impact of the total debt servicing ratio and the spectre of higher interest rates. Ms Chia Siew Chuin, director of research and advisory at Colliers International, which compiled the report, expects the average capital values of prime strata-titled space in Orchard Road and regional centres to remain flat for most of this year. Unit owners are expected to hold onto their price expectations, as such units remain rentable, she said. The report found that prices have held steady, despite fewer transactions. Prime Orchard Road strata-titled retail space averaged $6,942 per sq ft (psf) as at Dec 31, unchanged over the year. Prime retail space in decentralised locations also remained stable at $4,491 psf. Average monthly gross rents for prime retail space in Orchard Road slipped by 0.8 per cent year-on-year while they edged up 1.1 per cent in regional centres. Ms Chia expects prime rents to flatline this year. Rent movement for prime ground-floor retail space around Orchard Road is tipped to range between minus 1 per cent and 1 per cent, while regional centres could see rate growth plateau at 0 per cent to 2 per cent. The positive interest from retailers to set up shop or expand will still be matched by retailers resistance to any increases in their operation cost in a challenging operating environment, she added. With approximately 1.2 million sq ft of retail space expected to be completed in 2015, the overall islandwide demand for retail space will continue to be supply-led. Mr Calvin Yeo, deputy managing director at Colliers International, also noted that retail activities have gained greater prominence in residential town centres islandwide and are no longer as heavily concentrated in central Orchard Road locations. The report found that the rental premium that prime retail space in Orchard Road commands over similar space in the regional centres shrank to 6.9 per cent at the end of last year, from 9 per cent at the end of 2013. He added that the retail real-estate landscape is slowly diversifying, with shops and eateries sprouting in niche locations such as shophouse enclaves or within Housing Board estates. Additionally, the occupation costs are typically lower when compared to malls, noted Mr Yeo. Going forward, we expect that such alternatives will feature more in Singapores retail landscape, alongside the ubiquitous shopping malls. [email protected] - See more at: straitstimes/premium/money/story/sales-strata-titled-retail-units-hit-curbs-20150107#sthash.P8wC0HAk.dpuf
Posted on: Wed, 07 Jan 2015 01:16:24 +0000