Commercial rents continue to fall
Commercial landlords, especially those leasing out office space, faced a tough first quarter as rents kept tumbling - though it was good news for their tenants.
Rental data put the commercial property sector at odds with Singapore's wider economic outlook, which has enjoyed an uptick as a result of brighter global propects.
Urban Redevelopment Authority (URA) data showed that office rents fell 3.4 per cent in the three months to March 31, from the fourth quarter of last year, marking the eighth straight quarter of decline.
Retail rents fell for the ninth straight quarter by 2.9 per cent, much steeper than the preceding two quarters when rents fell 1.5 per cent.
The disappointing commercial property performance contrasted with the 2.5 per cent expansion of Singapore's economy in the three months to March 31 - boosted by a resurgent showing in manufacturing and other trade-dependent sectors.
"The dust has not settled," warned Ms Christine Li, research director at Cushman & Wakefield, noting that overall office demand has weakened.
While the recently completed UIC building and upcoming Marina One won fairly high pre-commitments for leases, older office spaces dragged down rentals.
Mr Desmond Sim, head of CBRE Research for Singapore and South-east Asia, said the 9.2 per cent fall in retail rents year-on-year was the largest year-on-year fall since 2011, when URA started tracking retail space data including food and beverage, fitness and entertainment businesses.
Analysts attributed this to the challenging retail environment, with increased labour costs and regional competition.