Strata retail volumes plunge to lowest since Q4 2011: DTZ Transaction volumes for strata-titled retail properties in the third quarter are at their lowest level in nearly two years, following the implementation of a Total Debt Servicing Ratio (TDSR) framework at the end of June. The 126 units that changed hands in Q3 was a 60 per cent plunge from the 382 units sold in the previous quarter. It was the lowest number of strata-titled retail transactions since Q4 2011, when 122 retail properties were transacted. The property consultancy pinned the decline in sales on the TDSR framework, which lengthened the loan application process for property purchases and reduced the amount that multiple-property buyers can borrow. Meanwhile, resale prices for prime strata retail space continued to grow at a slower pace in Q3 for all regions. The average capital value of prime resale retail units for the Orchard/Scotts Road area and suburban areas grew 1.7 per cent from the previous quarter. They had grown at a pace of 2.6 per cent and 2.5 per cent respectively quarter-on-quarter in Q2. As for retail rents, they halted their decline in Q3, with average rates in all regions staying unchanged, compared with the 0.3 per cent quarter-on-quarter drop in Q2, and the 0.7 per cent decline in Q1. Average rentals stood at $30.23 per square foot (psf) in the Orchard/Scotts Road area, better than DTZ had expected. This was attributed to the healthy pace of growth in tourist arrivals. Landlords are holding on to their rents even with some 359,000 sq ft of retail space potentially ready by the end of the year. The completion of asset-enhancement initiatives at Marina Square and Suntec City has also helped to increase shopper traffic in the area. Over in the suburbs, the average retail rent was flat in Q3 despite competition from JEM, and with the likes of Westgate and Bedok Mall expected to be completed by end-2013. Source: Business Times –24 September 2013
Posted on: Wed, 25 Sep 2013 07:17:23 +0000
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