Singapore Office Rents Drop to 7-Year Low as Vacancies ClimbBy
Office rents fall to lowest level since September 2010
Vacancies climb to 12.4%; the highest level since June 2011
Singapore office rents fell to the lowest in almost seven years as an oversupply of space saw vacancies climb to the highest in six years.
A gauge of office rents fell 1.1 percent to 155.6 in the second quarter, the lowest since September 2010, data from the Urban Redevelopment Authority showed Friday. The vacancy rate rose 0.8 percentage point to 12.4 percent. That’s the highest since June 2011.
Despite the falling rents, some analysts see signs of a turning point in Singapore’s office market.
A Malaysian-led group bid S$2.6 billion ($1.9 billion) in 2016 for a rare plot in the Marina Bay district, while Qatar’s sovereign wealth fund acquired an office building from BlackRock Inc. for a record S$3.4 billion last year. CapitaLand Commercial Trust sold a 50 percent stake in One George Street to FWD Group, an insurance company backed by Hong Kong billionaire Richard Li, for S$591.6 million.
“Recent Singapore office land sales have seen competitive bids and rental market bottoming out,” CapitaLand Commercial Trust Chief Executive Officer Lynette Leong said in a Bloomberg TV interview on July 19.
Residential rents slid 0.2 percent in the three months ended June 30. Singapore home prices fell 0.1 percent in the quarter, the data showed, less than the 0.3 percent decline in preliminary figures published July 3.
— With assistance by Melissa Cheok