Office rents forecasted to rise by 5-7% in 2018

Rents of Grade A office space in Singapore are expected to increase by five to seven percent this year, according to the 2018 Asia Pacific Property Outlook published by Colliers International on Wednesday (10 January).The forecasted rental growth is attributed to more positive economic prospects. Another reason is the recovery in the office leasing market thanks to rising demand from technology and media firms as well as new types of tenants like co-working space operators.“The demand for flexible workspace is expected to continue in 2018. However, there are very little commercial opportunities left in the market as operators secure service-exclusivity within developments of choice,” said Colliers International’s Head of Office Services Duncan White.“This limits the growth of flex operators and is a potential factor that could lead to further mergers and acquisitions, as well as consolidations of operators,” he added.Colliers International is also bullish on the outlook for business and industrial parks in light of the improved manufacturing industry and the government’s policies to improve the sector and promote the usage of new technologies.Meanwhile, the property consultancy’s latest report revealed that overall real estate investment sales here surged by more than half during the previous year.“Our preliminary data showed that investment sales in Singapore in 2017 rose by 54 percent year-on-year to $40.2 billion,” said Colliers International Singapore’s Research Head Tricia Song.In particular, commercial properties accounted for around $6.51 billion or 30 percent of the total figure. This was driven by major transactions such as the $660 million, $1.62 billion and $2.09 billion sales of the Chevron House building, the Beach Road Government Land Sales (GLS) site and Asia Square Tower 2, respectively.Source: CommercialGuru, 11 Jan 2018