Amid sluggish demand and continued growth in supply, Singapore office and retail rents continued to drop in the second quarter of 2016, according to the data released by the Urban Redevelopment Authority on 22 July.
Office rentals dropped by 3.5%, declining sharper compared to 2.1% fall in Q1 2016. This rental drop results to fifth consecutive and steepest fall in office rents since its peak in first quarter of 2015. Prices of Office dropped by 1.5%, it also marked the steepest fall in the four consecutive quarter of price moderation.
Meanwhile, rates of office vacancy edged down by 0.1% point from the quarter before, 9.1% in second quarter.
According to CBRE Research Head Desmond Sim, the decline in vacancy rates in the office market attributed to the limited new supply. He added that the next 6 to 9 months will turn out challenging as more supply enters the markets.
For Singapore retail front, rents also dropped steeper and further compared to the first quarter, declining by 3.9% in second quarter, marking a sixth straight quarterly decline.
Retail space prices fell by 3.1%, the steepest decline in five straight quarters.
Vacancy rate in retail space rose half a percentage point, from 7.3% in Q1 to 7.8% at the end of the Q2.