CCT explains why it remains optimistic on the CBD office market

Sizeable tenants relocating, limited supply incoming.

CCT maintains a positive outlook for the Singapore Central Business District or CBD office market, citing a move by many tenants into larger and better quality office buildings, as well as what the company sees as limited supply coming in 2014 and 2015.

"The outlook for the office market is sanguine given the consistent demand across active and diverse sectors such as professional services, energy and commodities, insurance and IT. Additionally, a number of sizeable tenants have activated relocation plans to better quality office buildings with increased space requirements; this also contributes to the optimistic view," said CCT.

"Historically, the net absorption for CBD office averaged approximately 1 million square feet annually from 1994 to mid-2013, almost equally matched by approximately 1 million square feet of average annual net supply over the same period. The forecast for Singapore CBD’s annual new office supply from 2014 to 2018 averages about 1.1 million square feet.

However, for 2014 and 2015, the actual new office completion in the CBD area is expected to be limited to only 1.2 million square feet for the two years. CCT’s Grade A office development, CapitaGreen, which is scheduled to be completed in 4Q 2014, is well positioned to benefit from this potential window of limited supply," it added.