Market Outlook

Office: Vacancy rate declined for the second consecutive quarter in 1Q18 on the back of the substantial improvement in net absorption as more tenants moved into their fitted-out premises in recently completed developments.

Access the article to find out more about SG’s Key Economic Indicators, Major Property Transactions, SG’s Offices as well as SG’s Residential and Retail performance!

The GPR/APREA AsiaPac Performance Snapshot tracks the dynamics of listed real estate securities (including REITs) across 12 AsiaPac countries/regions and eight sectors, over multiple time horizons.

• Listed real estate posted the highest total return in April 2018.
• Equities and REITs were the strongest performers over the past five years.
• On a ten-year basis, REITs outpaced rival asset classes, followed by listed real estate.

The soaring vacancy rates, which are in line with the continued completion of more new office buildings, have changed the recent “tenant market” situation. However, the overall 2017 market performance has indicated a sign of recovery, albeit moderately, with escalating enquiries for office expansion particularly from tenants exploiting the currently low rents. In 2018, Indonesia will move ahead with a 5.3% GDP projection, which will provide an interesting investment spot for overseas fund to come in, particularly in e-commerce and co-working business at least for the next two to three years.

Despite the Chinese New Year holiday, net absorption in the overall market still amounted to 160,900 sq ft in February on the back of relocation and consolidation requirements. Among the more notable new lettings, Kering pre-leased two whole floors (37,300 sq ft) at One Taikoo Place in Quarry Bay as part of their consolidation out of offices in Casuseway Bay, while RGA Reinsurance relocated within Swire Properties’ Island East portfolio, leasing 26,000 sq ft at Dorset House at accommodate expansion plans.

Click to find out more about the below:

• Labour market tightens further
• Grade A office vacancy rate continues to decline and stands at sub 3% for the fifth consecutive month
• Grade A rents continue moderate growth trend
• Tokyo Midtown Hibiya completes

Over the past 12 months, the addition of gross office space has been significantly constrained in the Melbourne CBD. This has led to a supply shortage, notably for larger occupiers, and driven pent-up demand from tenants who are coming to the market to satisfy their requirements

The GPR/APREA AsiaPac Performance Snapshot tracks the dynamics of listed real estate securities (including REITs) across 12 AsiaPac countries/regions and eight sectors, over multiple time horizons.

• Government bonds posted the highest total return in March 2018.
• Equities and listed real estate were the strongest performers over the past five years.
• On a ten-year basis, REITs outpaced rival asset classes, followed by listed real estate.

Singapore’s economy grew by 3.6% in 2017, a significant improvement over the growth of 2.4% in 2016…

Singapore’s economy grew by 3.6% in 2017, a significant improvement over the growth of 2.4% in 2016. The strong performance was supported by the finance & insurance sector, which grew by 4.8%. Economists expect 2018 GDP growth to come in at around 3%.

Results for Q4 2017:

Knight Frank’s Asia-Pacific Prime Office Rental Index increased 0.7% quarter-on-quarter and 1.1% yearon-year in the last quarter of 2017.

The increase in the index was the result of rising rents in 12 of the markets over the quarter, with rental declines experienced in four of the 20 markets tracked.

Over the next 12 months, we expect rents in 16 cities out of the 20 tracked to either remain steady or increase, which is the same as our previous forecast.

We expect Singapore’s property market to stabilize and strengthen over 2018, supported by broad-based GDP growth and an expected multi-year upcycle in the office and residential markets.

Physical supply in office, residential and industrial sectors is also easing from the oversupply situation of past years. Capital flows should remain buoyant as we expect interest rates hikes to be benign, and yield spreads are relatively attractive. Barring external shocks, we project a general uplift in rents and capital values over 2018, primarily driven by the office and residential sectors.