Singapore office sector remains weak

Share  |    |   Comment  |   E-mail to friend  |   Bookmark & Share   

Cautious market sentiment and waning demand restrained office leasing activities for Q4 2011, according to Savills Research Singapore.

Expectations from financial and banking services have declined significantly amid the current economic volatility.

In line with this, vacancies among Grade A office buildings in the CBD grew 6.9 percent, while Grade A rents slid 1.5 percent for the second consecutive quarter.

“Investment activity of en-bloc office space resumed, but Grade A capital values fell by 3.8 percent quarter-on-quarter,” it said, adding that “only two sites were offered for office development under the Reserve List of the 1H/2012 Government Land Sales (GLS) Programme.”

Moving forward, 2012’s bleak economic outlook will continue to affect the leasing market. Capital values are expected to decline by 10 percent while Grade A rents will likely fall 15 percent this year.

“Negative fallout arising from the prolonged financial turbulence and global economic slowdown has intensified, resulting in slower absorption of Grade A office space. This has continued to push up vacancy rates and put downward pressure on rents in the CBD,” noted Alan Cheong, Savills Research.

Overall, Singapore’s economy expanded 3.6 percent year-on-year in Q4 2011 and achieved a 4.8 percent growth in GDP for the whole year. However, the pace of growth has considerably dropped on a quarter-on-quarter basis.

Related Stories:

China investor in talks to acquire Goldman Sachs' HQ

Grade A office rents drop

CCT's 2011 distributable income falls to S$212.8m

Share  |    |   Comment  |   E-mail to friend  |   Bookmark & Share