Tough market conditions hit office, retail rents
Challenging market conditions continued to hit office and retail rents in the fourth quarter, although there are signs pointing to a brighter outlook for some landlords.
Office rents fell by 1.8 per cent from the third to fourth quarter last year, a far sharper fall than the 1.1 per cent from the second to the third, according to Urban Redevelopment Authority (URA) data yesterday.
That took the drop in rents to 8.2 per cent for the full year, markedly steeper than the 6.5 per cent decline in 2015.
"With continual supply pressure in 2017, we reckon rents will continue to soften at least for the first half," noted Dr Chua Yang Liang, JLL's head of research for South-east Asia.
However, new office buildings such as the upcoming Marina One have enjoyed good take-up over the past year.
Prices of office space fell by 0.6 per cent from the third to the fourth quarter, taking the full-year drop to 2.8 per cent.
As for the retail sector, rents eased 1.2 per cent from the third to the fourth quarter - better than the 1.5 per cent drop in the second to third quarter.
The islandwide vacancy rate for retail space improved to 7.5 per cent at the end of December - snapping four straight quarters of rising vacancies.