Demand for office space in Singapore improves and market in early upturn

A jump in new tenants looking to rent office space in Singapore was seen in Q1 2022, with investor interest also remaining positive. Survey respondents also view the market to be in the early stages of an upturn, according to the RICS Global Commercial Property Monitor, Q1 2022.

The appetite for commercial property is currently mixed in APAC, with cautious messaging coming from China and Hong Kong, but in Singapore there was a much more positive sentiment. The improvement is down to an increase in appetite for taking up office space, as well as strong demand for industrial space. 32% (net balance) more respondents saw an increase in demand for office space in Q1 2022, the first strong positive reading since late 2014. Industrial demand saw it’s third quarter of strong positive demand.  Looking at commercial property as a whole (retail, office, and industrial uses) occupier demand as is now firmly in positive territory.  

Investor sentiment, both foreign and domestic, is also holding steady across commercial property in Singapore, with positive sentiment being maintained across all sectors.  Given increased demand and maintained interest from investors in office space, the survey also reports that office construction starts are rising in the region.

Three and twelve month rent expectations and capital value expectations are also maintaining positive sentiment in Singapore.  Interestingly, in a more focussed market question, the negative mood around hotels also appears to be easing with capital values viewed as likely to grow by between 3 and 4% in Singapore.

Most respondents felt that commercial property value in the region is currently ‘fair’, and 58% view that the market is in an early upturn in the first quarter of 2022.  Anecdotal evidence collected with the survey is mixed, but some commentary cites that growth is expected ‘to firm up over the second quarter’.

Amara Buyse, Head of Public Affairs (APAC) commented, “As the Singapore Government continues to ease Covid management measures, people are returning to the office, and this is reflected in the jump in demand for new office space that we are seeing in the monitor.

“Moreover, with a significant influx of companies relocating their regional headquarters from Hong Kong to Singapore, investors are upbeat about the prospects of the commercial real estate market, anticipating this upwards trend to continue and even accelerate throughout 2022.”

-ENDS-

Notes to Editors:

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