And prime rents will head south.
Office occupancy rates in Singapore are expected to slide this year on back of a huge potential spike in supply, according to BNP Paribas.
Grade A and Grade B occupancy rates hovered at 94.84% and 95.04% as of the third quarter of 2015, but BNP Paribas analysts warn that overall occupancy rate will drop below 90% this year.
This is on back of an expected 4 million square feet of supply which is expected to enter the market this year, compared to demand of just over 2 million square feet.
As a result, prime office rents are expected to drop by 10% in 2016 and 2% in 2017.
“The timing of completions with a high concentration of office supply due in 2016 is a concern, which may impact rents more severely than widely expected during the period, in our view,” BNP Paribas said.
Do you know more about this story? Contact us anonymously through this link.