2014, 2015 predicted to be good years for Singapore office market

But this will be short-lived.

According to Maybank Kim Eng, this year and next may be a good, albeit short-lived, period for the office market in terms of supply. 

The dynamics would change when the 700,000-sq-ft CapitaGreen and 527,000-sq-ft South Beach Development are completed in 4Q14.

Here's more from Maybank Kim Eng:

And when both developments commence active marketing nearer their TOP date, it may lead to further downward pressure on office rentals.

Also not to be ignored is the impact of office supply from Outside Central Region (OCR) on CBD rentals.

We cannot rule out the possibility of high-quality decentralised developments like Westgate Tower in Jurong, Mapletree Business City Phase 1 at Pasir Panjang Road and The Metropolis at Buona Vista drawing tenants (albeit smaller floor-plate at times) away from CBD office buildings.

Already, Mapletree Business City has attracted big names such as Deutsche Bank, HSBC, Credit Agricole, Unilever, Nike, Toshiba and Samsung Asia, while potential tenants at The Metropolis include Shell, NOL, Procter & Gamble and GlaxoSmithKline.

And within the CBD, a hollowing out could occur when tenants exit buildings earmarked for en bloc redevelopment (possibly The Arcade at Raffles Place in the near term), sparking further substantial declines in Grade B office rentals.