Office market's takeup rate hit 1.59 million sqft in 2018

This surpassed the net supply of 1.51 million sqft.

In 2018, the office market outperformed expectations despite a relatively lacklustre performance in Q4 as CBRE Research noted that annual take up rate hit 1.59 million sqft, which is about 25 soccer fields in size. This beat the net supply of 1.51 million sqft, whilst vacancy was reduced to 5.8% as of end 2018 from 6.1% as of end 2017.

“This was supported by relatively healthy GDP growth and strong company formation figures,” CBRE Research said. “With occupancy rates improving, particularly for prime office space, rents have risen in tandem.”

In a previous report, data from JLL revealed that office net take-up is around 6% for the first quarter of 2018 alone, significantly higher than the 2-3% rates observed for the whole of 2017. They noted that demand came rushing into Singapore, wherein occupiers from technology, e-commerce, and flexible space operators moved into new supply, led the growth of office take-up in Southeast Asia, up by 6.8% in Q1.

Also read: Office take-up rate in Q1 alone beats 2017 record

However, Singapore’s office sector could fall prey to demand slowdown should economic concerns steam up, CBRE Research said. This could be remedied however to some extent by tapering the supply pipeline for the next three years, they added.

Also read: Steep rents set to boost office REITs only by H2 2019

Meanwhile, JLL noted that amongst notable deals include the divestment of 78 Shenton Way and Robinsons 77 as well as the sales in the shares in Capital Square and Ocean Financial Centre.

CBRE Research also said that Grade A core CBD rents sealed its sixth consecutive quarter of growth in Q4 to $10.80 psf which is a 20.7% increase from the rates in Q2 2017.

“Office rents are projected to maintain an upward trajectory albeit at a more measured pace as compared to the early part of the rental recovery cycle,” CBRE Research said.

For 2019 and the next few years, CBRE Research believes that the outlook is more likely to remain generally positive with stable demand and reduced supply pipeline.

“Interest for upcoming new developments is also fairly strong, with some notable pre-commitments already executed for projects in 2019 and 2020,” they explained.

Join Singapore Business Review community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

The sector scored 72.7/100 points in customer satisfaction in the Customer Satisfaction Index of Singapore.
The new system, set for implementation in 2022, will provide migrant workers with quality, affordable and accessible healthcare catered to their needs.
Four medical suppliers saw an average 48% increase in stocks as markets reacted to the new variant.
Their pre-departure tests in South Africa on 26 November were negative.
The new skills maps serve as a resource for training providers and financial institutions to design family office-related training.
Its high costs make the country a top choice for companies with higher-valued-added manufacturing.
HongKongLand had the most growth for the day.
It surpassed the Bloomberg consensus estimate of 14.5%.
The agreement aims to grow tourism and economic activities as borders reopen. 
It will also enter a loan agreement worth $210.6m.
The acquisition will be fully funded by cash through internal resources.
These countries are Cambodia, the Maldives, Sri Lanka, Thailand, and Turkey.
The decrease was driven by profit declines in their beer and non-alcoholic businesses.
Sources say the state-owned Chinese firm is in talks with advisers about the potential divestment.