Singapore office rents rise at faster pace of 5.1% in Q4 but retail rents slip 1.1%

For the whole of 2022, office space rents in the central region climbed 11.7 per cent after rising 1.9 per cent in 2021. ST FILE PHOTO

SINGAPORE – Rents of office space in Singapore’s central region rose 5.1 per cent in the fourth quarter of 2022 over the previous quarter. This is a bigger gain than the 2.1 per cent rise in the third quarter of 2022.

For the whole of 2022, office space rents in the central region climbed 11.7 per cent after rising 1.9 per cent in 2021, according to data from the Urban Redevelopment Authority (URA) on Friday.

The data also showed that prices for office space in the central region posted a quarter-on-quarter gain of 3.7 per cent in the fourth quarter, contrasting with the 2.7 per cent drop in the previous three months.

For the whole of 2022, the prices dipped 0.1 per cent after slipping 5.8 per cent in 2021.

Islandwide, there was a total supply of about 872,000 sq m in gross floor area (GFA) of office space in the pipeline as at end-2022, slightly more than the 858,000 sq m in the previous quarter.

The amount of occupied office space rose by 9,000 sq m in net lettable area (NLA) in the fourth quarter, a smaller expansion compared with the increase of 24,000 sq m in the previous quarter.

The stock of office space decreased by 23,000 sq m NLA in the fourth quarter, after declining 2,000 sq m in the previous quarter.

As a result, the islandwide vacancy rate of office space fell to 11.3 per cent as at the end of the fourth quarter, from 11.7 per cent as at the end of the previous quarter.

Retail rents

In contrast to rising office rents, retail rents in the central region fell 1.1 per cent in the fourth quarter over the previous three months. This is a bigger drop than the 0.4 per cent dip in the third quarter.

For the whole of 2022, retail rents in the central region dropped 2.4 per cent, a smaller contraction compared with the 6.8 per cent decrease in 2021.

Going by URA’s latest data released on Friday, prices for retail space in the central region shrank 2.1 per cent in the fourth quarter, after easing 3.2 per cent in the previous quarter.

For the whole of 2022, prices of retail space contracted by 7.8 per cent, a bigger fall than the 4.2 per cent decline in 2021.

Islandwide, there was a total supply of 420,000 sq m GFA of retail space from projects in the pipeline as at end-2022, up slightly from the 415,000 sq m three months earlier.

The amount of occupied retail space increased by 66,000 sq m NLA in the fourth quarter, which was 2.2 times the 30,000 sq m expansion in the previous quarter. The stock of retail space increased by 24,000 sq m NLA, compared with the increase of 10,000 sq m in the previous quarter.

As a result, the islandwide vacancy rate of retail space dropped to 7.1 per cent as at the end of the fourth quarter, from 7.8 per cent at the end of the previous quarter. THE BUSINESS TIMES

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