Singapore Q2 premium office rents hit 10-year high: Colliers survey
SINGAPORE, NNA - Grade A office rents in Singapore’s Central Business District rose to the highest level in 10 years in the April-June quarter on the back of strong demand from flexible workplace operators and technology firms, according to a survey by Colliers International.
The international real estate information company said Tuesday that in Q2, average monthly office rents were 9.93 Singapore dollars ($7.28) per square foot, up 3.0 percent from the first quarter, and 12.6 percent higher than a year earlier.
Of major contributors, rents in Raffles Place and New Downtown rose 2.4 percent in Q2 from Q1, while rents in Shenton Way and Tanjong Pagar increased by 3.2 percent and those in City Hall grew by 3.1 percent.
As a result of robust demand for premium office spaces, the vacancy ratio of Grade A offices fell to 2.9 percent from 3.9 percent in Q1.
“Tighter vacancies coupled with healthy space takeup among certain occupier segments – particularly technology and flexible workspace firms – continued to support rental growth in Q2 2019,” Tricia Song, head of research at Colliers International, said in a statement.
While rent growth is still strong, “the pace of increase has probably peaked” because of tenants are increasingly resistant to rent hikes, she added.
Colliers expects CBD Grade A rental growth to moderate from 15 percent in 2018 to 8 percent in 2019 and 5 percent in 2020, and subsequently decline slightly in 2021 in anticipation of higher supply in 2022 and a “potentially softer economic outlook.”