Office rents in Singapore saw their steepest decline in 11 years in the third quarter, official data showed yesterday, as the Covid-19 pandemic hit leasing demand for commercial real estate in the regional business hub.
Rents for office space fell 4.5 per cent on a quarterly basis in July-September, data from the Urban Redevelopment Authority showed. That was the biggest quarterly decline since the April-June period in 2009, when rents fell by 7.7 per cent.
The city-state, which is facing its deepest recession ever due to the pandemic, had implemented lockdown measures earlier this year and has been encouraging office workers to work from home, although some rules are easing as coronavirus cases fall.
"The office market could continue to face significant headwinds going into the next few quarters," said Ms Christine Li at real estate consultant Cushman & Wakefield. However, the office leasing market will benefit from the expansion plans of companies such as TikTok owner ByteDance and gaming giant Tencent Holdings, she added.
Yesterday's data also showed that prices of office space in the central region went up 0.2 per cent in the third quarter after declining 4.3 per cent in the previous quarter.
Islandwide, there was a total supply of about 767,000 sq m of gross floor area (GFA) of office space in the pipeline at the end of the quarter, against 668,000 sq m GFA at the end of the previous quarter. The amount of occupied office space fell by 19,000 sq m of net lettable area in the third quarter, versus a bigger drop of 55,000 sq m in three months before that.
Rents of retail space in Singapore's central region dropped 4.5 per cent in the third quarter, after declining 3.5 per cent in the previous quarter.
But prices of retail space in the central region rose 2.2 per cent in the third quarter this year, after a 1.5 per cent drop in the previous quarter.
Islandwide, there was a total supply of 428,000 sq m GFA of retail space from projects in the pipeline, up from 364,000 sq m in the previous quarter.
REUTERS, THE BUSINESS TIMES
What rents of retail space in the central region fell by in the third quarter, after sliding 3.5 per cent in the previous quarter.