Singapore office prices down, retail prices unchanged in Q3

Quarter-on-quarter, Singapore office prices dropped 2.4% while office rents dipped 3.5% in Q3 2021.

Singapore saw office prices decline 2.4% in the third quarter of 2021, reversing the 0.9% increase posted in the previous quarter, showed Urban Redevelopment Authority data.

Shirley Wong, Director of Research for Singapore at Colliers International, attributed the weak price performance to falling prices within the Central Area, which posted a 3.5% Quarter-on-quarter decline. Prices in the Fringe Area rose 1% quarter-on-quarter.

Office rents also dropped 3.5% in Q3 2021, compared to the 1.3% hike in Q2 2021.

Specifically, the Central Area saw rents dip 4%, while the Fringe Area only registered a marginal decline of 0.2%.

URA noted a total supply of around 755,000 sq m gross floor area (GFA) of office space in the pipeline in Q3 2021, up from the previous quarter’s 697,000 sq m GFA of office space in the pipeline.

The amount of occupied office space declined 5,000 sq m (nett) in Q3 2021, compared with the 23,000 sq m (nett) drop registered in Q2 2021.

Office space stock climbed 26,000 sq m (nett) during the period under review, moderating from the 34,000 sq m (nett) hike seen in the previous quarter.

With this, the island-wide vacancy rate rose to 12.9% as at end-Q3 2021, from 12.6% as at end-Q2 2021.

Meanwhile, prices of retail space held stable in Q3 2021, compared with the 2.8% decline in Q2 2021.

On the other hand, retail rent decreased 2.7%, after dropping 0.5% in the previous quarter.

“This is the seventh consecutive quarter of decline, resulting in rents falling 21.0% in total and bringing rents to 32.6% below the previous peak in Q4 2014,” said Wong.

She pointed that the drag “came from the Central Area, which saw rents decline 3.3% quarter-on-quarter in Q3 2021”. The Fringe Area also saw rents drop 1.2% quarter-on-quarter.

As at end-Q3 2021, there was “a total supply of 428,000 sq m GFA of retail space from projects in the pipeline, compared with the 419,000 sq m GFA of retail space in the pipeline in the previous quarter”, said URA.

The amount of occupied retail space rose by 33,000 sq m (nett) in Q3 2021, up from the 14,000 sq m (nett) increase seen in the previous quarter.

The stock of retail space grew by 7,000 sq m (nett) in Q3 2021, compared with the previous quarter’s 18,000 sq m (nett) increase.

With this, the island-wide vacancy rate of retail space dropped to 8.1% as at the end-Q3 2021, from 8.5% as at the end-Q2 2021.

Source: CommercialGuru, 25 Oct 2021