Singapore’s office rents will remain “a little soft” in 2017 and may pick up only by the end of the yr when the amount of new supply of space shrinks, according to CapitaLand Commercial Trust (CCT), one of the city-state’s biggest landlords.
About 2 . 3 million square feet of space was added this year, driving rents down by 15 per cent, said Lynette Leong, chief executive officer of the real-estate trust’s manager.
Less than 500, 000 sq ft are being planned annually starting in 2018, with no supply in sight coming from 2020, the lady said in an interview with Bloomberg Television on Tuesday.
“Given that there’s still some new supply coming on stream next year, we foresee that rents will remain just a little soft, ” Ms Leong said.
“However, it should recover by the end from the year considering that there’s very little new supply over the years ahead. ”
Office rents in the city’s central area possess fallen for the past six quarters, according to data from the Urban Redevelopment Authority, matching the longest stretch of declines since the global financial crisis because banks reduce their workforce.
The period of lower supply from 2018-19 will help the office market recover, Derrick Heng, an analyst at Maybank Kim Eng, said. “Our call is that there will be a bottom between late 2017 and early 2018 and rents will certainly recover past that. ”
The Reit that’s partly owned by simply CapitaLand Limited, South-east Asia’s biggest designer, owns properties such as Capital Tower and CapitaGreen inside the city’s economical district.
“Singapore is not just dependent on the finance and loan companies, ” explained Ms Leong. “There is also sectors which may have become more productive. Some examples happen to be technology firms – we have now the Facebooks and Amazons of this community. ”
The trust is certainly planning to redevelop a auto parking structure referred to as Golden Boot Car Park inside the financial location into the workplace building, in which it will put one million sq ft of space in 2021. “We believe that could be the next say of the office-market cycle, inches she explained.