Singapore’s office property market is anticipated to recover later this year despite the lacklustre performance during the second quarter, reported the Straits Times.
According to statistics from the Urban Redevelopment Authority (URA), the quarterly drop in office rents and prices eased in Q2 2017. The former improved from a fall of 3.4 percent in the first quarter to a dip of 1.1 percent, while the rate of decline in prices slowed down from 4.0 percent to 1.4 percent.
However, the vacancy rate rose from 11.6 percent to 12.4 percent alongside a 76,000 sq m gain in office supply during the second quarter of this year.
Despite the weaker figures, property experts are upbeat on the market’s outlook.
“There are signs that the office market is starting to turn the corner” following nine quarters of decline, said Cushman & Wakefield’s Research Director Christine Li.
For instance, banks and insurance firms here hired an additional 3,300 workers in Q1 2017, surpassing the 2,800 workers recorded for the whole of 2016.
“Taking into account these factors and the improvement in local and global economic growth, the office rental index is likely to reach an inflexion point and rebound in the second half of this year,” she said, adding that the price rebound would be led by premium buildings like the new office towers in Marina Bay.
Meanwhile, the retail property segment posted softer quarterly figures in Q2 2017.
Based on URA data, the decline in retail rents eased from 4.0 percent in the first quarter to 3.2 percent, while the drop in prices slowed down from 2.9 percent to 1.2 percent. However, the vacancy level increased from 7.7 percent to 8.1 percent.
According to JLL’s Research Head Tay Huey Ying, suburban malls were the bright spot in the retail sector as the demand of 15,000 sq m in this segment surpassed the net new supply of 13,000 sq m in H1 2017.
“This is in line with the continually strong interest for retail space in suburban malls, proving their resilient nature despite the persistently weak consumer sentiments.”