The Strata-shop sector has achieved good sales last year.

Roaring sales from the strata-shop segment at $661 million was clocked in last year, partially due to the residential properties’ cooling measures which shifted investment funds to the non-residential sectors.

Based on the caveats available from the Urban Redevelopment Authority, there were 615 such shop units being transacted last year which was quite close to the sales record of 632 strata shops sold in 2010 for a total $656 million.

The top 3 sales volume developments recorded were from Sim Lim Square with 33 units, Icon @ Changi with 29 units and Space @ Kovan with 28 units sold respectively.

A total 161 strata shop units were purchased from the primary market. The new launches provide an alternative for the market which lead to slight drop of about 9% on the resale market  last year.

Investors tends to look for alternative  investments instead of enduring net negative return were they to put their surplus fund into the bank due to high inflation and meagre interest rate earned.

As strata shops are in limited supply, therefore they provide good investment return over the long term for investors and there may be enbloc redevelopment potential as the building ages over the years.

To pre-empts rising rental cost, some business owners are buying strata shops to stabilise their business running costs.

For the first quarter of 2012, this sector saw a record 107 units sold by developers which is a record sales level in almost a decade.

The smaller area and thus lower price for strata shop was one of the factor that this sector is more popular versus the office sector for the investors.

For purchasers of older strata shops, one major concern for them would be the continuing repair and maintenance required for the ageing building.

 

13 May 2012