COMMERCIAL PROPERTY | Staff Reporter, Singapore

Chart of the Day: Office vacancy rate feared to spike as supply glut bites

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.

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