Half year net office take-up hits seven year high at 879,000 sq ft

This is about 75% higher than the five-year average (2013-2017).

Strong leasing demand buoyed Singapore’s net office take-up to its highest level since 2011 after hitting 879,000 sqft in the first half of the year alone, according to real estate consultant Savills. 

The strong showing represents a figure 75% higher than the five-year average posted in 2013-2017 with net absorption rates for Q2 hitting 304,000.

“The strength of the take up came partly from tenants’ moves into buildings completed in 2017 and also the strong take-up of secondary stock,” Savills said in a report.

Also read: Office space prices up 1.9% in Q2

The eager market response prompted overall vacancy rates in the CBD Grade A office market to drop by 1ppt to 7.8% in Q2 amidst an across-the-board tightening including Marina Bay, Raffles Place, Shenton Way, Tanjong Pagar, City Hall and Beach Road/ Middle Road with the exception of Orchard Road precinct.

Quarterly rental growth also picked up from 1.3% in Q1 to 2.5% in Q2, bringing the average monthly gross rent to $9.28 psf.

Amidst a supply crunch, Singapore’s CBD Grade A office rents are expected to rise by 10% in 2018, Savills forecasted.