Office Market Sentiment Improved In Q4 2020
SINGAPORE – The city-state’s office property market recorded large improvements on its perceived current situation and outlook over the next 6 months, according to the latest Real Estate Sentiment Index (RESI) published by the National University of Singapore (NUS).
In fact, Singapore’s office property sector registered a current net balance and future net balance of -26 percent and -11 percent respectively in Q4, up from the -69 percent and -47 percent witnessed during the previous quarter.
“With more businesses adapting to the pandemic and the global roll-out of COVID-19 vaccination, the economy is expected to improve, which will lift market sentiments across all sectors,” commented one of the respondents.
However, the office sector was the most downbeat segment, followed by the retail sector, which recorded a current net balance of -11 percent and future net balance of -2 percent. Both are the only segments with negative net balances for the period under review.
In contrast, suburban residential saw the highest current net balance of 81 percent, followed by industrial/logistics (54 percent) and business park/hi-tech space with 48 percent. For future net balance, industrial/logistics led the pack with 54 percent, trailed by suburban residential (53 percent), and business park/hi-tech space with 46 percent.
Meanwhile, rising construction costs overtook job losses/decline in the domestic economy, as well as a slowdown in the global economy as the top potential risk factor over the next 6 months.
“Since the start of the year, the proportion of respondents who indicated concerns on rising costs of construction increased from 76.9 percent in Q3 2020 to 85.1 percent in Q4 2020,” said the authors of the study.
Data for the index is compiled and calculated by the National University of Singapore Real Estate (NUS+RE), which collectively represents the school’s Institute of Real Estate and Urban Studies (IREUS) and Department of Real Estate (DRE).
RESI measures the confidence of senior executives regarding Singapore’s property and real estate development sector. Specifically, the survey gauges respondents’ perceptions and expectations about current and future property market conditions – that is from the past 6 months until the present and over the next 6 months respectively.
Respondents comprise industry experts such as consultants, property developers, professional firms, service providers, and financial institutions. The poll is carried out every quarter in March, June, September and December.