Islandwide office occupancy rates hit record high in June

It’s almost back to pre-crisis levels.

Here’s a heads-up for firms looking to establish headquarters in Singapore. Office space is rapidly becoming a scarce commodity in the country, a report by Colliers International revealed today.

The report noted that all Grade A office micro-markets across the island have reached near-full occupancy rate by the end of June 2014. Occupancy rates are all beyond 95%, with the highest rate of 99.4 per cent recorded for the Shenton Way/Tanjong Pagar micro-market.

“As growth momentum in both the global and local economy gather pace, firms across most industries saw brighter prospects during the quarter. Consequently, the office property market witnessed a new wave of leasing activities in both new and upcoming office developments – on the back of companies’ increasing expectations of business improvements, their ramped-up plans for growth and continued flight to quality,” stated the report.

Here’s more from Colliers:

International property consultant, Colliers International’s latest quarterly research report revealed that the office property market in Singapore experienced a stronger demand in 2Q 2014, amid a positive business climate.

Mr Marcus Loo (劳耀萳), Executive Director of Office Services, says, “The last time the market achieved such similarly-high occupancy rates was in 1Q 2008, when the market was at its peak before the global financial crisis. Back then, banks were primarily the ones that were progressively leasing space, as most of them were on an expansionary mode. Rents also shot up to levels not seen before, at as high as S$19.50 per sq ft per month for newer and higher-grade buildings.

However, the situation today is somewhat different – with demand coming from a myriad of different industries, such as oil and gas, insurance, telecommunications, pharmaceuticals, among others. This is a much more balanced state, which has inevitably led the landlords to feel confident about the market and its outlook.”

Outside the Central Business District, the office space market also saw several leasing activities in 2Q 2014. In fact, the largest leasing deal during the quarter – and to date this year – was the 210,000 sq ft of office space at Novena Square, which will be vacated by Procter & Gamble and reportedly taken up by the CPF Board.