Q4 2020 Singapore Strata Commercial Update (Knight Frank)

Strata Office Market outlook

•  In 2021, the strata office market together with the larger office sector in Singapore is expected to remain under pressure, with companies critically reviewing the way space is occupied in the post-pandemic era characterised by evolving remote work protocols. Therefore, transaction volumes as well as prices are likely to remain subdued for at least the first six months of the year.
• Nevertheless, as office users rationalise and right-size their space requirements, occupiers such as small enterprises may turn towards owner-occupied strata offices as a viable alternative to tenanted space. As such demand for strata offices, especially those in central locations, could improve in the second half of 2021.

Strata Retail Market outlook

• Moving forward, the global economic outlook remains uncertain with recurring infections in other nations despite the distribution of the vaccines. And even if vaccine distribution proves to be successful, prices of strata retail units in Singapore are envisaged to remain soft with more distressed sales expected due to the lack of tourists and safe distancing measures still in place.
• The demand for such strata spaces is expected to come from proprietors that intend to run their own businesses, preferring to set up shop in locations where strata retail developments tend to be typically located. Often the lower costs when compared to renting retail space in a prime shopping mall in the same location act as the greatest incentive.
• Thus, with the retail market gravitating towards more experiential placemaking strategies and migrating some of their services to digital platforms, there is a growing imperative for strata retail storeowners to also adopt similar ways to survive in a market that is in constant change.