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Colliers International expects the office market to bottom out towards the end of 2017, given the continued decline of CBD premium and Grade A rents, reported Singapore Business Review.
It noted that while recovery is slow, new demand is expected to return to more positive levels by the second half of 2017.
This indicates that the office market may prove to be more promising for landlords in the medium term.
With this, it urged occupiers to review their space requirements and take advantage of the softer market.
“Demand continues to lag behind supply comprising more relocations than expansions. Premium and Grade A supply in the CBD is expected to grow another 10 percent in 2017 on major completions,” said Colliers.
The property consultancy noted that the CBD vacancy rate was seven percent in Q4 2016, 5.9 percent in Q4 2017 and 11.1 percent by end 2017.
CBD and Grade A office rents, on the other hand, are expected to fall 0.2 percent quarter-on-quarter in Q4 2017, and two to five percent by end 2017.
Colliers expects prime office capital values to hold firm on investment demand.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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