Demand for Office Space in Singapore Increases in 2021

Canninghill Piers Location at River Valley Road

In the midst of positive net assimilation and fixing opportunity, the workplace market has started to give indications of recuperation, as per CBRE Research. Recuperation in the workplace area over 1Q2021 was driven generally by renting interest for Grade-A places of business. CBRE sees that there has been the development of a two-level market — a Grade-A Core CBD market and Grade-B islandwide office market — as occupiers center around Grade-A places of business inside the CBD, while the Grade-B office market keeps on wrestling with higher opening rates. Rents of the Grade-A (Core CBD) office stayed stable q-o-q at $10.40 psf each month (pm) in 1Q2021, while Grade-B (Core CBD) rents enlisted further decrease of 1.3% q-o-q to $7.80 psf pm.

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With its economy growing at a rapid pace, Singapore is expected to see a sharp increase in the demand for office space in Singapore. The office market in Singapore, particularly in the commercial sector, is showing remarkable improvement and growth, with more than half of the projects approved by project managers coming on stream in the past two years alone. Ongoing government investment and expansion in various infrastructure development projects are also boosting the economy further. Please see Canninghill Piers location for more info with regards to the development. One of the key reasons why investors consider a iconic development is also the fact that Canninghill Piers has a direct frontage of the River Promenade and therefore this provides an unblock view of the entire Singapore River

However, despite this, there are still some areas where investments are needed, and the market in Singapore is certainly far from saturated. Some sectors have yet to see any significant growth, but areas such as education, research and technology seem to be holding up well, at least so far as the private sector is concerned. Also, government and commercial property are both seeing growth, which is proving beneficial to the overall market.

The Grade-A (Core CBD) market enrolled a positive net assimilation in 1Q2021, as occupiers profited by the declining rents and took off to prime places of business, notices CBRE. Key interest drivers remember firms for the innovation and monetary administrations enterprises, for example, resource the board firms, and less significantly, family workplaces, it says. Generally speaking, the workplace market enrolled a positive net ingestion of 0.13 million sq ft in 1Q2021 after three sequential quarters of negative net assimilation.

In this regard, the latest report on the Singapore Office Market by Pantech Inc. forecasted that office market activity will continue to grow at a rapid pace over the next five years, with an increased focus on the corporate market by the government. As such, it predicted Singapore will continue to outpace other Asian countries in the outsourcing market. The report also noted that there is now a surplus of permanent jobs in Singapore, with many companies unable to fill their requirements. This, it said, will mean a continuing surge in demand for professionals, both domestic and foreign, at both the small and large levels.

The number of businesses registered in the country has also picked up, with both domestic and international clients flocking to take advantage of the improved services and facilities available in the country. This is especially true of the BPO sector, which has seen a sudden boost in clientele. It has not taken Singapore long to bounce back from the global economic recession, and is now arguably the strongest economy in the region. Tourism and shipping industries have also found a new direction, with the Marina Bay Sands resort in Singapore enjoying unprecedented success despite a downturn in the property market. Other sectors that have benefited from the recovery include the financial, banking and IT sectors.

For the private sector, there has been little to no impact so far on employment levels in the country, with more jobs being created in the service industry instead of new roles created in the public sector, according to Pantech. While the job market has appeared less competitive than in the past, this is likely to change with more emphasis placed upon education and skill set development in order to attract more international business. One thing that has not changed is the ability of entrepreneurs to find affordable, reliable technology. Singapore’s reliance upon high-speed broadband and digital wireless networks makes it an easy destination for entrepreneurs and international business to get their bases clear without having to spend too much. As such, Pantech forecasts that as technologies become more commonplace, the need for IT professionals will start to outstrip those that are coming to the country.

This stemmed to a great extent from Dyson Ltd’s rent responsibility at St James Power Station which was added to add up to office stock in 1Q2021. “Throughout the span of 2021, office request is relied upon to be upheld by gains in work and a slow recuperation of Singapore’s economy. Moreover, office rents will be upheld by a tight inventory pipeline,” says Catherine He, partner overseer of Research, Southeast Asia, at CBRE. Nonetheless, CBRE says that the workplace area recuperation won’t be uniform. As enormous corporates influence the momentary market notion to overhaul their office area, the Grade-A market is relied upon to profit by this pattern.

Nonetheless, CBRE expects the Grade-B market to confront further pressing factor from arising opportunity. “A silver coating for the workplace market is the public authority’s most recent declaration that telecommute is not, at this point the default and up to 75% of representatives can get back to the work environment with impact from April 5,” says David McKellar, co-head of office administrations, CBRE Singapore. “This looks good for the workplace market as more firms are progressively making arrangements for the arrival of representatives to the working environment and this builds up the significance of the actual office,” he says.

A key reason why businesspeople feel more confident about setting up operations in Singapore is the country’s stance on intellectual property. Singapore has long been renowned as a nation that protects the interests of its intellectual property. And while this attitude has not changed, there has been little to nothing to warrant the same expectation across other Asian countries. And when you consider that Singapore’s government does not interfere with your business, this does little to dissuade entrepreneurs or those who simply want a tax-free lifestyle when it comes to making investments.

With regard to finance, it’s easy to see why people in the private sector are flocking back to the country. Between good rates, access to offshore facilities and the ability to save money when it comes to utilising capital, Singapore is a viable option for those looking to open a venture. And the government has made it easy to do business in the country, so those looking to relocate can do so with relative ease. The recently passed Global Quality Improvement Program, for example, has helped increase government focus on quality of life in the private and public sectors. Additionally, Singapore’s stable interest rate and low cost of living make it one of the most affordable destinations to base a business from other nations.

But perhaps it isn’t these factors that have led the office market of Singapore into recovery mode. Instead, it’s the perception of the current status of the economy. With unemployment at an all time low, business opportunities have become easier to come by. And with the government’s emphasis on infrastructure and development – both of which have increased the demand for property – those looking to start a new venture should feel confident that they’ll have all they need to succeed. It’s a buyers’ market, but with a recovering economy on the side of the buyer, the Singapore office market should be able to cope.