Office Rents Forecasted To Grow 5.5% In 2021
SINGAPORE – Office rents across the city-state are forecasted to rise by 5.5 percent this year, while vacancy level is expected to fall to 5.0 percent, according to a report published by Colliers International on Friday (29 January, SGT).
“In 2021, market dynamics are conducive for an office sector recovery towards the end of 2021, with demand driven by the technology sector and overall business recovery,” stated the property consultancy in its latest Singapore Market Outlook.
At the same time, it foresees that capital values of office properties could edge up by 3.0 percent for the whole of 2021.
“Physical offices are here to stay as it remains critical to building corporate culture, collaboration, and socialization,” noted Colliers International. However, tenants are expected to favour more flexible offices with lower density due to the COVID-19 pandemic.
The property consultancy also thinks that more investors would take advantage of the URA’s CBD Incentive Scheme that provides bonus gross floor area (GFA) to property owners who redevelop office buildings into mixed-use projects.
“CBD office stock could be reduced as older and less efficient buildings make way for redevelopment.””
Moreover, would-be tenants are expected to gravitate towards office buildings with eco-friendly features, and such properties are expected “to lead the rental upside”.
“Corporate occupiers are increasingly aware of the strong connection between green buildings and employee health and wellbeing, job satisfaction, recruitment, and staff retention. Occupiers could also benefit from lower utility bills, improved productivity and comfort,” it explained.
