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Singapore is expected to remain one of Asia’s top occupier locations and the firmest office market in the region, according to Colliers International’s Asia Market Outlook 2019.
The property consultancy revealed that the city-state recorded the highest growth in average Grade A office rent last year at 15 percent. While the pace of increase is expected to moderate to 8.0 percent in 2019, annual rental growth could continue until 2020, but may weaken by 2021.
On the other hand, the annual supply of new office premises is projected to fall over the next two years, then rebound by 2021. As for the office vacancy level, it is envisioned to follow an alternating trend in the next three years, starting with a decline in 2019.
“In 2019, with a lower but benign real GDP growth forecast of 2.5 percent, Colliers thinks demand will stay firm; and the government’s push to promote technology, innovation and R&D will help feed growth in the market,” said Colliers.
“With reduced new CBD Grade A office supply over 2019–2021 and the continued tightening of vacancy should support rental growth.”
Meanwhile, the property consultancy believes that Singapore’s industrial property market could be impacted by uncertainty caused by the US-China trade dispute and global economic slowdown.
Nonetheless, demand for warehouses is anticipated to improve this year thanks mainly to e-commerce, with the supply influx of 2017 and the first half of 2018 steadily absorbed by the market.
Furthermore, rents of ground floor retail space in prime shopping malls along Orchard Road is expected to rise by 1.0 to 2.0 percent year-on-year in 2019 due to the lack of new supply in the area, while prime floor rents at suburban regional centres is forecasted to stabilise.
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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