The market situations for office and retail rents in Singapore have been consistently difficult despite the fact that fall in prices and rents has become less severe.
Following the latest report on Friday, July 28, the total office prices dropped by 1.4% in the second quarter, which is a gradual reduction from the 4% decline in the first quarter.
The reduction of 3.4% in the first quarter has triggered a continuous decline of 1.1% in office rents.
Moreover, the supply volume of office space edged up by 76,000 square metre in the second quarter, increasing the total available office space to 12.4%, from 11.6% witnessed in the first quarter of this year.
Recognising the uncertainties presented by these figures about the office property market, analysts are however positive with this property sub-sector. Experts from the office property market confirmed that it’s likely the office market has attained the optimum after a drop for eight consecutive quarters.
According to their reports, the new office buildings have been occupied by tenants, while the standard office rents were stable in the second quarter.
However, the retail office space consistently experienced slow patronage, although with less reductions.
The retail space values dropped by 3.2% in the second quarter as a result of a decline of 4% in the first quarter of the year.
In the same vein, rental rates dropped by 1.2%, due to 2.9% decline in the first quarter.
Islandwide vacancy rates of retail space increased from 7.7% at the end of the first quarter to 8.1% by the end of the second quarter.
The report further hinted that retail sales rose from March to May in the same period, which is a sign that consumer opinions are still robust when compared to other factors.
Despite all odds, the future of the rental market for the entire 2017 and even into 2018 is not bright, following the near non-existence of tenants and investors who drive demand.