Surge in Singapore retail properties put up for auction in 2021: Knight Frank

MORE Singapore retail properties went under the hammer last year, as the growth of the consumer-facing sector was stunted by recurring Covid-19 restrictions, Knight Frank wrote in a quarterly research report on Monday (Jan 31).

There were 84 mortgagee listings in the retail sector in 2021, up by 62 per cent from 52 in 2020.

The property consultancy said that in Q4 2021, a ground-floor shop unit in the mixed-use development The Midtown, along Upper Serangoon Road, transacted for S$1.07 million or about S$3,654 per square foot (psf), which was 2.8 per cent below its opening price.

There were also 101 owner-sale listings of strata retail units last year, soaring from just 17 in 2020.

Property auction listings are made up mainly of mortgagee and owner sales.

Knight Frank Singapore head of auction and sales, Sharon Lee, said that overall, auction listings in Singapore totalled 670 last year, rising 35.4 per cent from 2020, due to a spike in owner-sale listings "as some normality resumed in the auction market".

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However, the number of mortgagee-sale listings in 2021 fell by 5.6 per cent to 289. "While disrupted auction processes contributed to an overall dip in 2020 mortgagee listings, the drop in 2021 in contrast was likely an outcome of certain real estate sectors such as industrial and residential being on the path to recovery and improvement," she noted.

Despite the auction cancellations in the second and third quarters of 2020, the total mortgagee listings in that year were still 5.6 per cent higher than in 2021.

"Banks' inventories of auction properties shrank, especially for industrial listings with recovery in the manufacturing sector leading GDP (gross domestic product) growth in 2021," Lee said.

Among industrial properties, there were 65 mortgagee listings last year, down from 97 in 2020. Knight Frank noted that expanding small and medium-sized enterprises bolstered demand for owner-occupied industrial space, especially in the better locations. For instance, a ramp-up factory at Northstar@AMK sold for S$1.05 million, which was 19.3 per cent above its opening price.

Residential properties made up almost half of the total mortgagee listings in 2021. Of the 137 residential mortgagee listings, the bulk of them - 114 - were non-landed homes.

And a quarter of these non-landed properties were located in Districts 9 and 10, listed at an average opening price of S$2,218 psf. Lee said this is 7.3 per cent lower than the average transaction price of S$2,393 psf in 2021, based on caveats data downloaded as at Jan 17, 2022, which presents "a value opportunity" to buyers.

When it came to owner listings, about 41 per cent or 145 were residential properties. All the landed homes listed by the owners had opening prices of more than S$2.5 million, and over half of them were above S$5 million. "Owners generally held on to higher prices," Lee noted.

In the fourth quarter of 2021, auction listings declined by 23.3 per cent from the previous quarter to 115. These included 72 owner-sale listings in the October-December period, dipping by 28 per cent from the prior 3 months.

There were also 38 mortgagee-sale listings, down 9.5 per cent quarter on quarter, Knight Frank's figures showed.

Among the mortgagee-sale listings, a 1-bedroom condominium unit at D'Oasia changed hands at S$700,000 in Q4 last year. In the luxury segment, high-value sales included a 4-bedroom duplex condominium in The Berth by the Cove, which fetched S$3.76 million or 4.4 per cent above its opening price, as it rode on a resurgence of demand in Sentosa Cove.

Overall success rates during auction improved to 4.8 per cent last year, translating to 32 sales, up from 3.6 per cent in 2020.

As a result of the higher success rates, the gross sales value almost tripled to S$85.9 million in 2021, with larger-ticket properties sold under the hammer during the year.

"Additionally, many of these listings were known to have been sold outside of auction after gaining publicity from the auction process," Lee said.

READ MORE: Singapore property auction listings likely to gain pace as rates rise