The market for strata-owned apartments has dropped significantly, with most of the demand coming from end-users.
In Q2, all 224 strata-owned units changed owners, bringing the total transactions in the first half of this year to 523, which is 57 percent lower than the corresponding time period last year.
Average capital values and rent held stead for commercial industrial spaces, such as traditional factories, based on a grouping of privately owned businesses on the properties.
Weak Demand in Industrial Market
In Q2, commercial industrial average capital values for first-storey spaces were flat at $627 per sq ft, while those for upper-storey spaces were $470 per sq ft.
While the limited supply of properties that are permanently owned and longer-tenured kept prices firm, prices of short tenured industrial properties – such as those with 30 years or less left on the lease – began to decline. This was the result of difficulty moving into units that have shorter lifespans and higher finance costs, making them less appealing.
The Q2 monthly rent for first-storey commercial industrial spaces remained firm from the previous quarter at $2.20 per sq ft, and the monthly rent for upper-storey spaces going for $1.80 per sq ft in Q2. Regardless of the large supply, the take-up rates were slower in Q2.
Robust Demand for Business Space at better locations
Rentals in the business park and high-tech spaces grew due to demand by leasing queries for newer and better located developments. Landlords gained some power to raise the monthly rent, business park rent went up from $4.78 per sq ft in Q1 to $4.90 in Q2, and high-tech spaces crept up from $3.15 per sq ft in Q1 to $3.20 in Q2.
Rising prices in office rent have driven office tenants to more economical business parks and high-tech spaces since rent can be 30 to 60 percent lower than the average amount in the central business district and the outlying suburban areas. Intel and Roche Diagnostics are examples of businesses making this shift.