CICT' s Q3 net property income more than doubles to S$242.6m room for retail recovery

 

SG office market expects continued rental recovery: analyst

According to Cushman & Wakefield, rental performance in the Singapore office market is seen to continue on its road to recovery.

This comes after the positive net absorption of CBD Grade A office space for the second consecutive quarter. As of the third quarter (Q3) of 2021, this reached 283,000 square feet (SF), an increase when compared to the 183,000 sf in the same period in 2020. 

CBD Grade A rents also rose for the second consecutive quarter. It recorded an increase of 0.5% quarter-on-quarter (QoQ) in Q3. This was led by Marina Bay, Raffles Place and Shenton Way/Tanjong Pagar. These posted CBD Grade A QoQ rental growth rates of 1.6%, 0.3% and 0.1%, respectively.  

Wong Xian Yang, head of Research, Singapore at Cushman & Wakefield, credited this to quality and tenant displacement. 

&ldquo The recovery in net absorption was driven by flight to quality and tenant displacement  demand from office towers planned for redevelopment. Examples include Red Hat and FTI  Consulting which are relocating from AXA Tower to CapitaSpring and One Raffles Quay  South Tower respectively. Moreover, technology and finance occupiers have continued to  expand their headcounts, driving up demand for Grade A office spaces.&rdquo

The net supply of available space, however, remains elevated. The vacancy rate climbed to 5.8% in Q3 2021, up from 4.6% from the previous quarter. 

According to Wong, this vacancy rate is expected to narrow going forward. 

&ldquo The vacancy rate is expected to narrow going forward. A substantial amount of Grade A  vacant spaces are currently under negotiation and are likely to be snapped up over the next  few months. The positive economic outlook for Singapore and the recovering global  economy, coupled with accelerated vaccinations - which will allow the further reopening of key  advanced economies - will be supportive of Singapore&rsquo s open economy and help to prop up

business sentiment.&rdquo