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Singapore’s office property market will continue to benefit from the robust economic growth across Southeast Asia and the creation of the ASEAN Economic Community (AEC) in 2015, according to JLL’s upcoming research report entitled ‘The Emerging Powerhouse of Southeast Asia: What does it mean for Real Estate Investors?’.
The city-state’s office property sector has been vibrant in the past three years as continuing regional growth has attracted multinational firms to establish a presence there, said Chris Fossick, the consultancy’s Managing Director for Singapore and Southeast Asia.
“This is reflected in the strong demand we are seeing for grade A office space, which is in turn driving construction,” he said.
Amidst the healthy existing and forecasted rental demand, office assets in Singapore are also very sought-after by investors, triggering bidding wars for investment properties, noted Fossick.
Despite an upcoming large supply of office developments in 2016 to 2017 that could put downward pressure on rents, JLL predicted that the republic’s office sector will be supported by the region’s flourishing economy and the recovering US in the long term.
Launched this year, the AEC aims to transform Southeast Asia into a single market of more than 600 million people. This large economic and population bloc has already brought about many benefits such as higher visitor arrivals, as well as greater inter- and intra-regional trade. There is also bigger demand for logistics, while financial and insurance services have been expanded.
Another trend that bodes well for the region is its urbanisation rate, which is expected to go beyond 50 percent by 2020 from 47 percent today as an additional 8 million people per year are forecasted to migrate from rural areas to cities during the said period. Furthermore, Southeast Asia’s middle class is expected to grow by another 70 million over the next five years.
Nikki De Guzman, Editor at CommercialGuru, edited this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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