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Amid weaker demand and a continued increase in supply, office and retail rents in Singapore continued to fall in the second quarter of the year, data from the Urban Redevelopment Authority released on Friday (22 Jul) revealed.
Office rents here fell 3.5 percent, falling steeper that in Q1 when it fell 2.1 percent. This also marked the fifth consecutive and sharpest decline in office rents since its peak in Q1 2015. Office prices fell by 1.5 percent—the steepest decline in the four straight quarter of price moderation.
Source: URA
Meanwhile, vacancy rates edged down by 0.1 percentage point from the previous quarter, 9.1 percent in Q2.
CBRE Research Head Desmond Sim attributed the decline in vacancy rates in the office market to the limited new supply. He noted however that “the next six to nine months will prove challenging as more supply is completed.”
Over at the retail front, rents also declined further and steeper compared to the previous quarter, falling by 3.9 percent in Q2—its sixth consecutive quarter of decline.
Prices of retail space fell 3.1 percent, the biggest in five straight quarters of decline.
Retail space vacancy rate rose half a percentage point from 7.3 percent at the end of Q1 to 7.8 percent at the end of the second quarter.
Source: URA
Commenting, Sim said: “Vacancy continued to increase as challenges remain. Pressure will mount on the back of supply coming in in the next 12-24 months.”
He noted, however, that these effects “are largely cyclical and offers markets an opportunity reboot.”
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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