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Prices of office spaces in the republic declined by 0.1 percent in the first quarter (Q1) of 2015, revealed the Urban Redevelopment Authority (URA) on Friday (24 April). This is follows the 2.4 percent increase recorded in the previous quarter.
In terms of rental, office space rents showed signs of weakness in the first quarter of the year, recording a rise of just 0.6 percent following a 1.7 percent increase in the previous quarter, URA statistics showed.
Commenting on this, Colliers International Director of Research and Advisory Chan Siew Chuin said: “In 1Q 2015, the net new supply of office space totaled 236,806 sq ft, with the completion of South Beach comprising the most substantial introduction of new office space to the market. This could have partly caused the moderation of upward rental momentum.”
According to URA, Q1 data shows that there was a total supply of about 880,000 sq m gross floor area (GFA) of office space in the pipeline.
The amount of occupied office space in Q1 increased by a net 19,000 sq m, compared to a net 6,000 sq m decrease in the previous quarter. The stock of office space increased by a net 22,000 sq m in the first quarter, compared to the increase of a net 145,000 sq m in the previous quarter.
Looking ahead, Colliers said the office property market in Singapore is expected to remain resilient, and continue to grow in 2015, with net absorption being supported by stable leasing activities.
Meanwhile, retail property prices remained unchanged in Q1, after an increase of 1.5 per cent in the previous quarter. However, the retail sector saw rents decline by 0.3 percent in Q1, after a 0.5 percent increase in Q4 2014.
Based on URA real estate statistics at the end of 1st Quarter 2015, there was a total supply of 723,000 sq m GFA of retail space from projects in the pipeline.
The amount of occupied retail space decreased by 25,000 sq m in Q1 while the stock increased by 34,000 sq m. As a result, the island-wide vacancy rate of retail space rose to 6.8 percent at the end of 1st Quarter 2015, from 5.8 percent previously.
Graph source: URA
Nikki De Guzman, Editor at CommercialGuru, wrote this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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