Clarification on media report
Colliers International refers to the article “Glitzy CBD buildings mask rental woes” published in The Straits Times on 25 January 2019. The headline and subsequent editorial commentary in the article – particularly about landlords struggling to hold on to tenants and tenants wondering why rents are higher in the CBD despite ageing buildings and dated amenities – were not Colliers’ views and do not align with its forecast for the office market.
The Singapore office property market continued to recover last year with average prime CBD rents rising by 15% year-on-year. In 2019, Colliers Research projects that rents could climb – albeit at a slower pace - by 8%, owing largely to the high base in 2018. Colliers remains positive about the outlook of the Singapore CBD office market – both in terms of the demand for space and rental upside. Vacancy of Premium & Grade A office stock in the market is limited and should remain below 6% until 2022.
While Colliers’ inaugural Landlord Sentiment Survey – which was conducted last year – found that landlords had cited tenant retention as a challenge, it made no mention that they are “struggling” to hold on to tenants as the article had indicated. Prime grade CBD office space remains well sought-after by occupiers, both existing tenants and new prospects.
The article had erroneously painted a dismal picture of the Singapore office property market which is at odds with Colliers’ optimistic view on the sector. The stable economic growth, tight supply of CBD Premium & Grade A office space, and growth in demand for space – such as from the tech and flexible workspace sectors – present landlords with a bright outlook for office property segment.