Office investment volumes crash 59.7% in Q3
But office investment sales are expected to improve in the next quarter.
Total office or mixed-use office investment volumes declined by 59.7% quarter-on-quarter (QoQ) in the third quarter (Q3) of 2021 to $519m.
Only one major transaction took place with the sale of 61 Robinson for $422m, or $2,973 per square foot. Other office strata acquisitions were made for The Octagon, GB Building Suntec City, and PLUS.
"Going forward, investment transactions [are expected] to pick up in Q4 2021, as it believes that the long-term attractiveness of Singapore to investors and the appetite for high-quality freehold or premium and Grade A office buildings are intact," Colliers said in a release.
Rents of Grade A offices in the Central Business District (CBD) had an increase of 0.7% QoQ to reach $9.59 per square foot, after five quarters of decline. This was mainly spurred by demand for office space in Raffles Place and the New Downtown (Premium) and also includes newer buildings in Shenton Way and Tanjong Pagar.
Net absorption also contributed with a showing of 398,600 square feet from a contraction of 12,600 square feet a quarter ago. This demand was also fueled by technology companies, most notably, LinkedIn with its 22,000 square feet expansion in Marina Bay Financial Tower 2.
June Chua, Executive Director, head of Tenant Representation, likened this phase to a u-turn recovery. “Grade A office rents in Q3 2021 appeared to have bottomed out, and the office market has entered a phase of a U-shaped recovery. Demand continues to be supported by the expansion of technology firms, as their intensified talent acquisition efforts have led to the growing need for good-quality office space to accommodate the additional headcounts.