Bookmark & Share
Office space rents in Singapore is expected to surge by 25 percent from 2014 to 2019 – the highest rental forecast among Asian global cities, according to Knight Frank’s Global Cities 2015 Report.
Globally, the city-state has moved up to the 4th spot due to the anticipated jump in office rents in the next five years, behind San Francisco (36.2 percent), Madrid (28.7 percent) and New York with 28.2 percent.
Previously, Singapore was at the 14th spot in the 2008-2013 ranking for having the second lowest rental growth of -29.1 percent among Knight Frank’s 15 global cities.
Meanwhile, the city-state’s overall vacancy rate is estimated to reach 10.3 percent by end-2014, but it is anticipated to improve to 7.7 percent by 2019.
For the immediate future, prime office rents here are expected to grow by up to 10 percent on an annual basis by year-end thanks to the country’s stable economy and the improving global business sentiment.
“Looking ahead, prospects for the office market are positive, in light of anticipated healthy demand from companies looking to set up business or expand in Singapore. The fairly modest supply of new prime grade office space over the next few years would sustain prime office rental growth. This would fuel interest in Singapore office space investments with stable capital values,” said Alice Tan, Knight Frank Singapore’s Head of Consultancy & Research.
She added: “In 2015, rental growth is probably going to keep apace, maybe by 6 to 7 per cent. However, as new supply comes on stream in 2016 in Tanjong Pagar, as well as in 2017 when M+S office spaces will be completed at Marina Bay, the overall rental growth will likely to be moderated to under 6 per cent, barring any unforeseen economic circumstances that might creep up in the next five years.”
Nikki De Guzman, Editor at CommercialGuru, edited this story. To contact her about this and other stories, email nikki@propertyguru.com.sg
Related Articles:
S'pore Office REITs lagging behind global peers