Rent for the main office spaces in Singapore is said to drop to about 14%, somewhere towards the end of 2015 and 2019. Which comes through as the second worst rental drop in over 31 cities around the globe. This was brought to peoples notice when Knight Frank’s real estate company did a report on it yesterday.
Among the large supply that’s due to hit the market anytime this year or the next, the need for good office spaces still remains unsettled. This can be because of the rather slow economic growth and a not-so-supportive technological sector that seems to be thriving. These are the very organisations that are starting up shops outside of the centralised business districts.
In comparison to similar global cities, Singapore’s government provides business premises with their own parking space and with the growth seen in tech firms, you won’t notice a rise in growth among the CBD. Even though you can notice a firm intent in developing and implementing proper principles by the government of Singapore, they do prefer to drive this up north in clusters and this was stated by Knight Frank’s Executive Director and Head of Advisory – Mr. Calvin Yeo.
He also went on to say that Apple and Google were among the tech companies that have decided to set up business outside of Singapore’s CBD. This however has bridged a gap with cities like Shanghai that comprise of tech companies that primarily contribute to the influx of rent prices on the rise and prime office spaces.
According to the 2017 report published by Knight Frank on Global Cities – Sydney popped up as having the best opportunities, with office rents in prime locations expected to rise by 27.5% between the end of 2015 and the end of 2019. Berlin comes in second place with a forecast for growth by 25% followed by certain other countries. In the Asian region Shanghai came in with the highest ranking and was placed sixth with an increase of 19.2% among the expected rise in office rents. The worst hit however was Bogota where a decline of 17.3% in rents is expected.
It must be said though that the Singaporean market isn’t without some positive spots. Firms that specialise in co-working spaces came forward with the latest demand in the CBD driven area and this was reported by the firm Savills.
The latest example of this would include a 20,000 square foot space for the purpose of co-working by the Capital Tower Point, which is a partnership between CapitaLand. This can be located on the 12th floor and works as a collective space between the two firms – stated both companies.
However Alice Tan – the Head of Research at Singapore’s Knight Frank frim stated that around 6 million square feet of total gross area, has been set aside as office space. This is said to come through around 2016 or 2017 and will definitely weigh in on rentals for short term purposes. The decline might indicate a moderate drop sometime next year, however a recovery might not be possible until 2019.
Learn more: http://www.todayonline.com/business/spore-has-second-worst-office-rental-prospects-out-31-cities