Sim, Head, CBRE Research, Singapore and South East Asia:
Q2 URA statistics indicate continued pressure across all sectors of
residential, office and retail, against the backdrop of a sustained period of
uncertainty in the market and weak global sentiment, exacerbated by existing
rates are inching up, aggravated by the completion of residential projects sold
three to four years ago. This is placing pressure on the leasing market as
expatriate demand has eased. Still, other indicators point to a trough
approaching. The pipeline supply is coming down, and take-up has gone up as a
function of supply. Changes in prices have been minimal at 0.4%; unsold stock
is steadily being reduced. This quarter, unsold stock came down by 881 units to
21,489 units, which is equivalent to two mid- sized developments.
rates in the office market have also edged off slightly on the back of limited
new supply but the next six to nine months will prove challenging as more
supply is completed. Despite current muted demand, pre-commitment levels remain
healthy, with flight to quality the main driver.
was impacted the most, with the largest decline in rentals recorded since Q2
2011, the sixth consecutive quarter of decline. Vacancy continued to
increase as challenges remain. Pressure will mount on the back of supply coming
in in the next 12-24 months.
effects, however, are largely cyclical and offers markets an opportunity to
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