Marketbeat: Singapore Office Snapshot | Cushman & Wakefield
Singapore Economy Outperforms
Singapore’s economy grew by 5.2% YOY in 3Q2017, surging from the growth of 2.9% YOY in 2Q2017. The strong performance was supported by the finance & insurance sector, which grew by 5.9% YOY. Economists now expect full-year GDP growth to exceed 3%.
Leasing Demand Strengthens
With the newly completed projects enjoying high occupancy rates, the office market it now firmly tilted in the landlord’s favor. Cosmetics firm Shiseido leased 43,000 sf at Frasers Tower, which has attained a pre-commitment rate of 40%. Meanwhile, the coworking segment continues its inexorable march forward. WeWork accelerated the pace of its expansion by leasing 60,000 sf at 71 Robinson Road and 40,000 sf at Funan, with plans to open more locations in 2018. There is also market talk that Regus is in advanced negotiations to take up 40,000 sf at 18 Robinson.
Rental Growth to Accelerate in 2018
The overall Grade A CBD rent rose by 3.4% to S$9.20 psf/mo during 4Q2017. This took full-year rental growth to 6.6%, reversing the 6.9% rental decline in 2016. With both the global and local economy on a firm footing and business confidence strengthening, the pace of rental growth will accelerate in 2018. Accordingly, Grade A CBD rents are projected to increase by approximately 10% barring unforeseen circumstances.
Office MarketBeat is a brief summary of the Office sector in key cities, providing comment on recent trends as well as market data and analysis of the impact on commercial real estate.