Office sector could get respite from supply pressure by 2018

Thanks to around 808,000 sqft of space to be completed through 2020.

The office market remained subdued as office rents in the CBD continued to trend downwards as office rents are under pressure due to significant new supply in the CBD of 1.7m sq ft in 2016 and 2.2m sq ft in 2017.

Moving forward, Edmund Tie & Co forecasts office rents to decline further. It notes though that the pressure from supply is expected to ease from 2018, with around 808,000 sq ft of space expected to complete in the CBD from 2018 to 2020.

"The leasing market is expected to be more competitive with around 195,000 sq ft of shadow space in the CBD. Additionally, about 630,000 sq ft of future vacant space is expected to come into the market in the near future," it said.

According to Edmund Tie & Co., the current downturn is similar to that from 2001 to 2004, when the Singapore office sector faced pressure from uncertainty from Iraq War and dot-com burst. Notwithstanding, it notes that the firms will take shorter time to restructure as Singapore is at a stronger position.