Office prices rise for sixth straight quarter: Cushman & Wakefield

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/ EdgeProp
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January 26, 2019 2:02 AM SGT
Singapore’s Office Price Index rose 5.7% for the whole of 2018, compared to a 2.4% decline in 2017, according to URA’s real estate data released on Jan 25.
Source: URA
“With [the] Office Price Index rising for six straight quarters, accumulating a total gain of 8.9% from the trough in 2Q2017, office prices are just 0.07% away from the all-time high in 2Q2015,” points out Christine Li, senior director and head of research at Cushman & Wakefield Singapore.
Source: URA
The recent residential property cooling measures have diverted institutional investors’ interest from the residential sector to the commercial space, says Li. The “office sector will remain a star performer in 2019”, she adds.
Meanwhile, rents increased by 7.4% for the whole of 2018, despite falling in the last quarter by 0.5% q-o-q. “The increase in office rents in 2018 was supported by limited supply in the CBD and strong demand from both co-working operators and technology firms,” says Calvin Yeo, executive director and head of office advisory at Knight Frank Singapore.
Source: URA
Demand for office space rose significantly in 2018, with net absorption islandwide amounting to 1.85 million sq ft in 2018, more than 2017’s absorption of 645,834 sq ft, highlights Li.
She attributes the demand to the “rapid” expansion of co-working firms, such as Hong Kong-based Campfire taking up 85,000 sq ft at 139 Cecil Street, and The Work Project (in which CapitaLand took a 50% stake) leasing 41,000 sq ft in Asia Square Tower 2, as well as 31,000 sq ft in Capital...