SINGAPORE (EGGEPROP) - Grade-A office rents in the CBD continued to decline by 5.1% q-o-q to $9.84 psf per month in 3Q2020, says Cushman & Wakefield (C&W) in its report on the office market.
The expansion of Chinese tech firms in Singapore due to geopolitical tensions has driven demand for offices, says C&W. These firms include ByteDance, which is planning to make Singapore its regional hub as it expands into Asia, and has also applied for a licence to operate a digital bank in Singapore. Tencent has also chosen Singapore as its hub and plans to open a new office in the city-state. Other bright spots include the upcoming redevelopments of AXA Tower and Fuji Xerox Tower in 2021.
Although office leasing activity has remained sluggish, some vacated spaces have been taken up by occupiers that are seizing the opportunity to lease prime spaces at more attractive rates. QBE Insurance is relocating to Guoco Tower, taking up 31,000 sq ft of space vacated by Grab, which is moving to one-north. Meanwhile, Amazon is leasing 90,000 sq ft across three levels at Asia Square Tower 1 that were previously occupied by Citi.
Despite the positive moves, the office market faces significant challenges as the prevalence of staff working from home is expected to remain widespread in the short to medium term, cautions C&W.
It expects office rentals to fall by 10% in the full-year 2020, with a further decline in 2021.
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