Office rents see first decline since mid-2017 with 0.6% drop in Q1; retail rents slip 0.2%

Office buildings in Singapore's central business district, on Oct 9, 2018.
Office buildings in Singapore's central business district, on Oct 9, 2018.PHOTO: ST FILE

SINGAPORE - Rents of office space in the central region of Singapore slipped by 0.6 per cent in the first quarter of 2019 from the previous three months, figures from the Urban Redevelopment Authority (URA) showed on Friday (April 26).

This was the first quarter-on-quarter decline in office rents since the second quarter of 2017 and reverses the 0.5 per cent increase in the previous three months.

Prices of office space in the central region rose 3.0 per cent for the first quarter - faster than the 2.4 per cent increase in the previous quarter.

Total supply of office space in the pipeline stood at about 733,000 square metres in gross floor area (GFA) at the end of the first quarter this year, slightly more than the 732,000 sq m of space at the end of 2018.

The amount of occupied office space increased by 19,000 sq m in net lettable area (NLA) in Q1, compared with the addition of 39,000 sq m in the previous quarter. The stock of office space shrank by 6,000 sq m NLA, compared with the increase of 59,000 sq m NLA in the previous quarter.

As a result, the islandwide vacancy rate of office space declined to 11.8 per cent at the end of Q1 2019, from 12.1 per cent at the end of 2018.

In the retail property market, rents in the central region of Singapore slipped 0.2 per cent in the first quarter of this year, after rising 1.2 per cent rise in the previous quarter.

 
 

There was a bigger fall in the price of retail space in the central region as they slumped 1.9 per cent in Q1, contrasting with the increase of 1.5 per cent in the previous quarter.

Total supply of retail space from projects in the pipeline was around 364,000 sq m in GFA at the end of the first quarter, down from 387,000 sq m at the end of 2018.

The amount of occupied retail space fell by 14,000 sq m NLA in the first quarter, against an increase of 24,000 sq m NLA in the previous quarter.

The stock of retail space decreased by 2,000 sq m NLA in Q1, in contrast with the increase of 84,000 sq m NLA in the previous quarter.

As a result, the islandwide vacancy rate of retail space rose to 8.7 per cent at the end of the first quarter this year from 8.5 per cent at the end of last year.