Still Challenging, Yet Promising Outlook
The office sector is still facing challenges throughout the remainder of 2021, but the pace of rental decline seems to be slowing.
Net absorption is still negative, occupancy rates have dwindled, and rents remain under pressure. Despite this, optimism has improved as we move towards 2022, particularly given a more positive outlook for economic growth.
Landlords need to communicate closely with tenants who may be at risk of having to early terminate leases and work to try to retain them. Landlords in oversupplied markets are advised to prioritise securing good quality tenants over increasing rents. Property owners must also be more accommodative by offering incentive packages, shorter lease terms, options in new leases and other benefits such as providing parking and signage. On the tenant side, we recommend occupiers capitalise on current weak leasing sentiment to negotiate better terms before the window of opportunity closes.
