Landlords are being forced to bend over backwards.
There seems to be no bright spot in Singapore’s murky office market, as its central business district’s occupancy rate fell by 0.4ppt to 95.8%.
Prime Grade A rents also fell 3.5% to S$10.90, from S$11.30 psf pm in 2Q.
According to a report from Barclays Research, this brings the cumulative drop to 4.4% from its 1Q15 peak.
Barclays notes that as the market gets tough, landlords may have to think outside the box to attract new tenants, while thinking of ways to retain its strategic tenants.
“CCT expects downward pressure on market rents due to above-normal volume of new office supply in 2H16-1H17. KREIT expects market conditions to be challenging due to the upcoming office supply over the next two years and possible rising interest rate environment,” the report said.
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