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Despite the overall soft demand conditions within the economy, Singapore’s business park market remained stable in Q3 2016, with islandwide vacancy falling from 13.8 percent to 12.5 percent, according to CBRE.
Leasing activity was held up by several smaller sized deals by medical- and technology-related firms. Among the new tenants included medical firms Japan AMED and APACMed at Ascent as well as Service Source and Pfizer at Mapletree Business City II.
“Enquiry levels have been stable with some pipeline deals in the works supported by firms from a range of industries including banking, info-communications and transportation,” it said.
On the supply front, CBRE noted that future available space is still limited as all three business park projects in the pipeline are built-to-suit developments.
With this, JTC launched a land site through a Concept and Price Tender in August that could provide some continuity within the market. Located in Mediapolis, the site – which is set for completion in 2018 – could potentially provide up to 361,000 sq ft of business park space in gross floor area.
With no new multi-user supply expected to enter the market, landlords experienced little pressure as business park rents held firm in the third quarter of 2016.
“The exception was some older developments in International Business Park which saw minor downward calibrations; this was likely a result of the relatively high vacancy rate in this submarket,” said CBRE.
Looking ahead, CBRE expects sustained interest in newly completed projects to help bolster overall occupancy. However, this could be a gradual process considering the weak business sentiments and competition in the form of lower office rents.
“Rents will continue to be capped due to the narrowing premium to decentralised office rents, with some downward pressure on rents of older business parks located in the decentralised areas expected,” it added.
Nikki De Guzman, Editor at CommercialGuru, edited this story. To contact her about this or other stories email nikki@propertyguru.com.sg.