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Singapore’s commercial property market is in mid-downturn, or is yet to hit rock bottom before rebounding, said Royal Institution of Chartered Surveyors (RICS) in a report.
Majority or 78 percent of RICS contributors to its Q2 2016 Global Cities Commercial Property Monitor believe that the market is set to plummet further, with rents expected to contract further in the next 12 months.
Notably, rental values are expected to fall 3.3 percent at the headline level with industrial properties bearing the brunt of the negative outlook.
As the growing availability of leasable space continues to dampen demand, more respondents (77 percent) indicated that rents will fall over the next quarter, compared with the 64 percent expressing the similar pessimistic sentiment in Q1.
To lure tenants, landlords were seen increasing their incentive packages. However, according to the RCIS, the move is expected to have little effect on rental prices.
Investor demand fell also for the fourth consecutive quarter in Q2, with only the office sector registering a rise in interest from prospective buyers.
“However, the increase in the supply of offices for sale significantly outpaced the growth in demand and capital value expectations remain in negative territory across all segments of the market,” said RICS.
Meanwhile, the survey showed that 33 percent of the respondents felt that credit conditions had improved relative to Q1.
Over the next three months, 63 percent of respondents expect capital values to fall with prices declining across all sectors.
Looking ahead, most of the respondents expect capital values to fall rather than increase over the next 12 months, with headline prices dropping by 2.5 percent.
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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