Singapore office rentals rise by quicker 2.5% in Q3 over Q2; vacancy eases to 12%

OFFICE rents in the central region of Singapore rose 2.5 per cent in the third quarter of this year over the previous three months, property data from the Urban Redevelopment Authority (URA) on Friday showed.

This is a quicker pace of gain than the 1.6 per cent increase posted in the previous quarter.

Year on year, the rental index is up 9.6 per cent. The latest reading marks the fifth consecutive quarter-on-quarter rise in the index since it bottomed in the second quarter of last year; the index is up 12.2 per cent from that trough.

URA's data also showed that prices of office space in the central region notched up just 0.1 per cent in the third quarter over the previous three months, after rising 1.9 per cent in the second quarter.

At the end of Q3, there was a total supply of about 793,000 square metres (sq m) gross floor area (GFA) of office space in the pipeline, compared with 725,000 sq m in the previous quarter.

The amount of occupied office space increased by 45,000 sq m net lettable area (NLA) in Q3 2018, compared with the increase of 74,000 sq m in the previous quarter. The stock of office space rose by 28,000 sq m NLA in Q3 2018, compared with the increase of 60,000 sq m in the previous quarter.

As a result, the islandwide vacancy rate of office space eased to 12.0 per cent at the end of Q3 2018, from 12.2 per cent at the end of the previous quarter.