Singapore office market recovery well underway: Colliers
Premium and also Grade-An office complex in the CBD also remained to see solid leasing demand, with favorable net absorption of around 134,000 sq ft in 1Q2022. Meanwhile, the vacancy price tightened to 3.3%.
On the back of limited yields and interest rate uncertainties, capitalists are advised to concentrate on energetic property monitoring or improvement to accomplish return targets.
In regards to the CBD micro-markets tracked by Colliers, office complex in the Raffles Place/New Downtown location, in addition to the Shenton Way/Tanjong Pagar location, saw the greatest growth in rents, increasing 2.3% q-o-q to get to $11.96 psf.
At the same time, on the financial investment front, ordinary funding values in the section enhanced 5.6% q-o-q in 1Q2022, striking $2,850 psf. Similarly, net yields compressed by 0.1% q-o-q to 3.4%, with cap rates can be found in between 3% and 3.6% in the last quarter.
Colliers advises tenants take very early action on future office decisions, as the market shifts in favour of property managers. Landlords of workplace properties with obsolete specs ought to take into consideration repurposing or redeveloping their properties, to future-proof them.
Leasing deals throughout 1Q2022 included style seller Shein taking up 21,000 sq ft at Marina Bay Financial Centre Tower 3. German chemical company BASF will be relocating from its existing premises at Suntec Tower 1 to the upcoming Guoco Midtown.
Progressing, Colliers anticipates office possessions in prime areas to continue bring in a vast array of capital, underpinned by a healthy and balanced leasing market outlook, limited new supply, and the reopening of Singapore’s borders.
A workplace study by Colliers for 1Q2022 indicates that the improvement momentum in the Singapore office market is well in progress. Premium and also Grade-A workplace rents in the CBD rose for a third consecutive quarter in 1Q2022, boosting 1.5% q-o-q to get to $10.26 psf, supported by healthy and balanced renting need. This marks the fastest rate of development because rents rebounded in 3Q2021.
The sector is expected to continue growing in the coming months, sustained by a broad-based financial improvement as well as return-to-office momentum. Colliers prepares for rentals for CBD premium and also Grade-An offices to expand by 4% to 5% in 2022.
The healthy and balanced leasing demand for the CBD premium and also Grade-An office section is backed by corporates’ preference for more recent office complex with premium specifications, in preparation for workers going back to the workplace and also the expected pick-up in company activity.