Singapore has Asia’s worst-performing prime office market: report

Rents dipped 2% in Q3.

Prime office rents in Singapore saw the largest drop among 19 key Asian cities in Knight Frank's latest Prime Office Rental Index.

Rents in the Raffles Place and Marina Bay submarkets dropped 2% quarter-on-quarter in Q3, dragged by lacklustre demand among large firms.

“There has been rising strains on the demand of office spaces in Singapore, as economic growth prospects weaken and business enterprises exercise greater caution in signing leases,” said Alice Tan, Director and Head of Consultancy & Research, Knight Frank Singapore.

Tan expects prime office rents to decline by 6% to 7% year-on-year for the last quarter of 2015, with further downward pressure expected for 2016 in light of possible subdued business conditions.

“In addition, the consolidation of office spaces particularly by large-space occupiers, coupled with an impending supply of close to 4 million sq ft of office space next year are creating a tenants' market situation,” Tan said.