The technology sector is set to drive demand for office space in Singapore.
The office sector remains positive, and rent forecast is expected to rebound by 5.5% by the end of 2021, according to a research by global commercial real estate service provider Colliers.
According to Colliers Research, CBD Grade A rents stabilised in Q1 2021, declining only 0.3% QoQ to $9.54 cents per square foot, dragged mainly by the Orchard (-0.9% QoQ) and Raffles Place/New Downtown Premium (-0.7% QoQ) micro-markets.
According to executive director and head of tenant representation June Chua, landlords are increasingly more confident of renting their spaces out, with some rental increases even witnessed in selected, high-value buildings
“Occupiers should take this opportunity to lock in leases early as rents hit an inflexion point," she added.
Colliers also said that the technology sector has been driving up demand for offices. Colliers Singapore head of research Tricia Song said that CBD Grade A office net absorption turned positive in Q1 2021, after two consecutive quarters of contraction.
“This is a sign of recovery, and we can expect rents to rebound 5.5% by end-2021, in line with the GDP growth, as supply stays at benign levels," Song said.
Meanwhile, investment volumes surged by 13.9% YoY to $850m in Q1 2021, a sign of confidence returning with the global vaccine roll-out according to Colliers.
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