Office Rents in Singapore: Expected to rise by 25% by 2019
According to Knight Frank’s Global Cities on its 2015 annual report, office space rentals are expected to increase by up to 25 percent from 2014 to year 2019, which is considered to be the highest forecast in rental rates among Asian global cities.
The Lion City has moved up to the fourth place, behind other cities like San Francisco(36.2%), Madrid(28.7%), and New York(28.2%), because of the predicted increase in office rents in the next five years.
Surprisingly, Singapore was just at the 14th place in ranking during 2008-2013, for having the second lowest rental growth of -29.1% according to Knigh Frank’s 15 Global Cities.
By the end of 2014, the city’s total vacancy rate is prospected to reach 10.3%, and it is anticipated to improve in about 7.7% by the year 2019.
Furthermore, prime office rents are expected to climb up to 10% by the year-end. This is due to the country’s improving global business image and its stable financial economy.
Alice Tan, Head of Consultancy and Research for Knight Frank Singapore said, “Looking ahead, prospects for the office market are positive, in light of anticipated healthy demand from companies looking to set up business or expand in Singapore. The fairly modest supply of new prime grade office space over the next few years would sustain prime office rental growth. ”
She also added,”This would fuel interest in Singapore office space investments with stable capital values.In 2015, rental growth is probably going to keep apace, maybe by 6 to 7 per cent. However, as new supply comes on stream in 2016 in Tanjong Pagar, as well as in 2017 when M+S office spaces will be completed at Marina Bay, the overall rental growth will likely to be moderated to under 6 per cent, barring any unforeseen economic circumstances that might creep up in the next five years”