Singapore office rents fall at slower clip of 3.5% in Q4, but retail rents drop by faster 5.2%

For the whole of 2020, prices of office space shrank 10.7 per cent.
For the whole of 2020, prices of office space shrank 10.7 per cent.ST PHOTO: KUA CHEE SIONG

SINGAPORE (THE BUSINESS TIMES) - Rents of office space in the central region of Singapore fell 3.5 per cent in the fourth quarter of 2020 over the previous three months, a smaller rate of decline compared with the 4.5 per cent drop in the third quarter.

For the whole of 2020, office rents dropped 8.5 per cent, after falling 3.1 per cent in 2019, according to figures released by the Urban Redevelopment Authority (URA) on Friday (Jan 22).

URA's fourth-quarter data also showed that prices of office space in the central region decreased 3.1 per cent, contrasting with an increase of 0.2 per cent in the previous quarter.

For the whole of 2020, prices of office space shrank 10.7 per cent, compared with the decrease of 0.6 per cent in 2019.

Islandwide, as at the end of the fourth quarter of 2020, there was a total supply of about 770,000 sq m gross floor area of office space in the pipeline, compared with the 767,000 sq m in the previous quarter.

The amount of occupied office space increased by 2,000 sq m of net lettable area (NLA) in the fourth quarter of 2020, compared with the decrease of 19,000 sq m in the previous quarter.

The stock of office space decreased by 13,000 sq m of NLA in the fourth quarter of 2020, compared with the decrease of 33,000 sq m in the previous quarter.

As a result, the islandwide vacancy rate of office space decreased to 11.8 per cent as at the end of the fourth quarter of last year, from 12 per cent as at the end of the previous quarter.

Retail space

Rents of retail space in the central region fell 5.2 per cent in the fourth quarter of last year over the previous three months, a bigger pace of decline compared with the 4.5 per cent drop in the previous quarter.

For the whole of 2020, rents declined by 14.7 per cent, contrasting with the increase of 2.9 per cent in 2019.

URA's fourth-quarter data also showed that prices of retail space in the central region decreased by 2.1 per cent, reversing the increase of 2.2 per cent in the previous quarter.

For the whole of 2020, prices of retail space shrank 4.5 per cent, against an increase of 1.3 per cent in 2019.

Islandwide, as at the end of the fourth quarter of 2020, there was a total supply of 426,000 sq m gross floor area of retail space from projects in the pipeline, slightly lower than the 428,000 sq m in the previous quarter.

The amount of occupied retail space rose by 24,000 sq m of NLA in the fourth quarter of 2020, compared with the decrease of 50,000 sq m of NLA in the previous quarter.

The stock of retail space fell by 26,000 sq m of NLA in the fourth quarter of 2020, after shrinking by 53,000 sq m in the previous quarter.

As a result, the islandwide vacancy rate of retail space declined to 8.8 per cent as at the end of the fourth quarter of 2020, from 9.6 per cent as at the end of the third quarter of 2020.