Rents also rose 1.5 percent on a quarterly basis.
Singapore saw prime office rents increase 23.7 percent year-on-year in the first quarter of 2019 – the highest among its peers in the Asia-Pacific region – partly due to the limited supply of mid-sized unit, revealed a Knight Frank report.
On a quarterly basis, rents in the city-state rose 1.5 percent.
Knight Frank Asia-Pacific prime office rental index slid 0.4 percent quarter-on-quarter in Q1 2019, although it remains up 6.2 percent year-on-year.
The property consultancy attributed the quarterly decline to continued heightened global uncertainties led by the trade re-escalation between the US and China, Brexit as well as various major elections across the region.
Of the 20 cities monitored by the index, 15 registered either stable or increased rents, down from 17 in the previous quarter.
Aside from Singapore, other cities that registered an increase in rents were Bangkok (6.1 percent quarter-on-quarter), Manila (3.5 percent quarter-on-quarter), Melbourne (2.8 percent quarter-on-quarter) and Sydney (1.1 percent quarter-on-quarter).
Office rents in India were mostly flat in the first quarter of 2019, with Mumbai and Bengaluru rising 0.1 percent and 0.0 percent quarter-on-quarter, respectively, after a robust performance in 2018 due to the chronic undersupply within the two markets, aggressive co-working expansions in Mumbai and solid demand from IT/ITeS tenants in Bengaluru.
Meanwhile, office rents in Hong Kong contracted 1.6 percent quarter-on-quarter, while China’s Beijing and Shanghai posted a 1.4 percent and 2.1 percent quarter-on-quarter drop.
“An expected muted start to 2019 as the persistent headwinds from 2018 continue to weigh on market sentiment. We continue to believe 2019 will be a challenging year for the Asia-Pacific office markets with rents likely to see a more muted rise compared to 2018,” said Nicholas Holt, Asia-Pacific head of research at Knight Frank.
The property consultancy expects the rental index to “rise between zero to three percent this year, down from 2018’s 7.7 percent rise”.
Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email firstname.lastname@example.org