Bookmark & Share
Property analysts hold a general view that rents of Grade A office space in Singapore’s central business district (CBD) will continue to grow in 2019, albeit at a more moderate pace, reported the Business Times.
According to JLL’s initial estimates, average monthly gross rent of such premises will end the year at about $10.16 psf, which translates to a 10.8 percent gain from $9.17 psf in Q4 2017 and surpasses the 7.6 percent annual increase last year.
“The dearth of new Grade A CBD supply in 2019 coupled with the withdrawal of Chevron House for refurbishment will further tighten supply and pressure up rents next year,” said JLL Singapore’s head of research and consultancy, Tay Huey Ying.
“However, the availability of new supply outside the CBD should help to relieve some pressure and cap CBD Grade A rental growth for 2019 at below the 10.8 percent estimated for 2018.”
Similarly, CBRE’s research head for Singapore and Southeast Asia, Desmond Sim, forecasted that monthly rents of Grade A core CBD office space will increase by 9.3 percent to $11.80 psf in 2019, after posting a 3.3 percent and 14.9 percent gain in 2017 and 2018.
“Office rents are projected to maintain an upward trajectory over the next two to three years, albeit at a more measured pace compared with the early part of the rental recovery cycle.”
Likewise, Colliers International’s research head, Tricia Song, expects CBD Grade A office rents to appreciate by 8.0 to 10 percent in 2019, after registering growth of 2.3 percent and 18.8 percent in 2017 and 2018.
However, Savills Singapore research head, Alan Cheong, who thinks that CBD Grade A rents will rise by 8.0 to 10 percent next year, warned that the market could face potential headwinds.
These include the US-China trade war, geopolitical tensions, and interest rate hikes that could negatively affect demand for office space in Singapore.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
Related Articles:
IFS Capital completes sale of Suntec Tower One office
Despite rising office rents, Singapore still a cost-effective location: JLL