Why did the Singapore office market thrive in 1Q12?

Colliers says additional buyer’s stamp duty imposed in the residential sector had investors looking for alternative asset options.

According to Colliers International, the office sales market was thriving in 1Q 2012, as evidenced from the quick take-up rate witnessed at new launches. For instance, all the 100 strata-titled office units at PS100 on Peck Seah Street were snapped up during its launch in March 2012 at an average price of S$3,000 per sq ft. Meanwhile, projects launched in 4Q 2011 continued to gather sales momentum. By the end of March 2012, about 78 per cent of Robinson Square had been sold at prices ranging from S$2,750 per sq ft to S$3,029 per sq ft, while 85 per cent of the 442 units released in Paya Lebar Square found buyers at an average price of S$1,750 per sq ft.

These developments reportedly attracted a mix of investors and end-users from design agencies, shipping and logistics, investment, business consultancy and professional services firms.

Beyond the low interest rate and high inflation environment that kept investors active in the office sales market, the introduction of the additional buyer’s stamp duty imposed in the residential sector had investors looking for alternative asset options. This, in turn, played a part in raising the interest level in strata-titled office units.

Supported by the robust sales activities, the average capital value of Grade A office space in the Raffles Place/New Downtown area held firm for the second consecutive quarter at S$2,459 per sq ft in 1Q 2012.