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The forecast came on the back of the Ministry of Trade and Industry’s projection that the Singapore economy will expand by 4% to 6% next year.
CBRE Research expects office rents to fare better in the second half of 2021, consequently resulting to an overall positive rental growth for the entire 2021, reported Singapore Business Review.
The forecast came on the back of the Ministry of Trade and Industry’s projection that the Singapore economy will expand by 4% to 6% next year.
“Office demand is expected to remain relatively subdued in 1H 2021, as firms will still remain cautious in the wake of the COVID-19 pandemic,” said CBRE Research as quoted by Singapore Business Review.
“Should economic activity and business sentiment recover after the administration of the vaccine by Q3 2021, the office market is well poised to benefit from the gains in employment.”
CBRE Research revealed that five new projects are set to be completed by 2021, adding 1.23 million sq ft to the office stock.
Of these, only one would be a Grade A office development – CapitaSpring, which would add 0.65 million sq ft into the Grade A (Core CBD) market.
“The initial office supply pressure for 2022 has been dissipated due to construction delays, but which augured well for the office market as it provided more time for pre-leasing activities,” said Desmond Sim, Head of Research for Singapore and Southeast Asia at CBRE.
“The future supply that will spread over a longer time horizon allows demand and supply dynamics to recalibrate.”
And with AXA Tower and Fuji Xerox slated to undergo redevelopment, CBRE Research expects the Grade B office market to witness increased occupier movement as occupiers in those buildings are displaced.
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