Demand driving rental growth in Singapore office market | 24 December 2014
Businesses in Singapore are paying more for their office space, with a lack of supply driving significant growth in rental prices, a new report claims.
Experts at property consultancy Jones Lang LaSalle (JLL) say prices in some areas of the country have risen by more than ten per cent due to high demand, and predict the trend could continue in the coming years.
The group’s projections suggest growth of 16 per cent could be possible in certain areas of the island’s Central Business District (CBD), including Raffles Place, Marina Bay and Shenton Way.
That said, supply will also begin to grow in the near future, with a number of major projects in the pipeline. According to channelnewsasia.com, around 3 million square feet of new space will be made available in 2016 and 2017 alone. The buildings at Marina Bay, Shenton and Tanjong Pagar Centre are expected to put pressure on demand and, in turn, rentals.
One expert, Raffles Quay Asset Management CEO Warren Bishop more land will need to be freed up if the balance between supply and demand is to be met. He was quoted by shafaqna.com as saying: “When you are talking about a site being released in 2015, it is unlikely to come to market until 2019-2020.
“We would probably see there is certainly room for the release of more land within the Marina Bay area. Looking at the longer term beyond 2018-2019, there will be consistent demand, what has been released is probably not going to be enough to meet that demand.”
In contrast to the growth in office space rents, prices in the industrial property sector fell by three per cent in 2014, with the decline set to continue in 2015.
The views expressed in this post are those of the author and are not necessarily those of Qube Global Software. All facts are verified where possible directly by the author.
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Staff from Qube Global Software will attend MIPIM Asia, the two day global leader summit, at the beginning of December 2015. Topics this year include Asia Pacific inbound and outbound investment flows, regional development opportunities and projects, and real estate trends.
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