Share: Share on Facebook Share on Twitter Share on LinkedIn I recommend visiting to read:%0A%0A {0} %0A%0A {1}

Cushman & Wakefield's Analysis on URA Quarter Statistics 4Q2019



Office rental index staged a second consecutive quarter decline, accelerating the decline at 3.2% in the fourth quarter last year, as weaker business sentiments and growth prospects persist against the backdrop of multiple economic headwinds in the macro-environment. The decline is the steepest since the first quarter of 2017, signaling that the office rental cycle could have peaked.
Despite lower market confidence, annual islandwide net absorption still outperformed, resulting in improved islandwide vacancy rates from 12.1% as at the end of 2018 to 10.5% at the end of 2019. Total net absorption for the year amounted to 1.67 million sq ft, outweighing total annual net supply of 279,861 sq ft.  
Despite lower market confidence, landlords have been able to hold their rents steady for the moment due to tight vacancies and limited upcoming supply. Based on Cushman & Wakefield’s Grade A CBD rental basket, office rents continued to hold in the final quarter of the year, resulting in an overall rental increase of 2.8% increase for the whole of 2019. 
As economic uncertainties are taking a toll on the ability of companies to secure budget for relocation and expansion, limiting the demand for office space. In order to stay put in the CBD, corporate occupiers are also exploring ways to optimise the use of office space, including the use of co-working, re-configuring their office layout, putting people on flexi-hours and reducing the size of the work stations.
While office-using employment is expected to grow at a slower pace over 2020-2021, office leasing demand will continue to be mainly driven by finance, tech, and professional services firms. Unlike other cities where co-working operators are downsizing, the co-working sector in Singapore is stable. It has become the norm for all new projects to include a sizable co-working component. For instance, The Great Room has taken up 26% of the total space in Afro-Asia i-Mark, which is completing in 2020.
An annual average of 700,000 sq ft of Grade A CBD new projects will be completed over 2020-2021. This is 42% lower than the historical average of 1.2 million sq ft of new supply injected annually over the past decade. The supply crunch will only ease in 2022 when 1.9 million sq ft of prime space from Central Boulevard Towers and Guoco Midtown are completed.
Although only a few new projects are completing over the next couple of years, pre-leasing activity has been slow. Landlords of buildings under construction have been holding the rents firm to take advantage of the rental upcycle at the expense of higher pre-commitment rates. On average, only about 40-50% of the upcoming spaces have been pre-leased. 
With the current office rental cycle nearing the peak, it remains to be seen if landlords of these upcoming projects will take decisive action to boost occupancy rates in time.
Nevertheless, further tightening of the office supply due to potential redevelopments and the subsequent expiry of transition offices in the city fringe may limit the softening in rents.
The period of rental moderation will also provide opportunities for forward-looking tenants to adopt a flight to quality strategy by locking in long leases at favorable rates in prime buildings, in anticipation of a ramp-up of hiring in subsequent years when the global economy recovers. Post-2021, office rents are projected to surge as Singapore remains an attractive destination for regional headquarters.


All things considered, 2019 was a relatively good year for the private residential market. Though total volumes fell by 13.5% to 19,150 units, overall private property prices managed to grow 2.7%.
Developers sold a total of 9,912 units, surpassing 2018’s sales by 12.7%. However, resale volumes fell by 31.2% y-o-y to 8,949 units as en bloc activities went quiet after the last round of cooling measures in the second half of 2018. Short-term speculative activities still remained suppressed, going by low sub-sale volumes at only 289 units for the whole of 2019.
Overall unsold inventory continued to fall for the third consecutive quarter, falling 5.6% in Q4 2019 to 30,473 units. Unsold inventory is concentrated in the Rest of Central Region (RCR, or mid-tier) with 12,414 unsold units compared to 10,227 in the Outside Central Region (OCR, or mass market) and 7,832 units in the Core Central Region (CCR).
Overall private residential prices rose by 0.5% q-o-q, driven by the landed segment which rose 3.6% in 4Q2019. Non-landed prices fell by 0.3%, weighed down by the CCR and RCR segments which fell 2.8% and 1.3% respectively. OCR segment bucked the trend, rising by 2.8% q-o-q. For the whole of 2019, overall private residential prices rose by 2.7%, with both landed and non-landed segments recording gains of 5.7% and 1.9% in 2019 respectively.
On a y-o-y basis, the OCR and RCR segments rose by 4.2% and 2.8% respectively in 2019. CCR market was the weakest market, with prices falling 1.7% in 2019. We believe that the price decline was partially driven by the volatility of the CCR index due to its relatively lower transaction volumes and a wide range of new launch prices depending on the location and tenure. 
Surprisingly, overall rents fell 1.0% q-o-q even as the occupancy rates continue to rise to 94.5%, the highest since Q1 2013 when the occupancy rate stood at 94.8%. For the whole of 2019, rents rose by 1.4% y-o-y. Rents are expected to continue rising into 2020, driven by high occupancy rates and low levels of incoming supply in 2020. Only 6,294 private residential units are expected to be completed in 2020, this would be an historic low since available data from 1996.
In sum, the increase in new sales transactions and growth in overall prices is testament to the resilience of private residential property. The outperformance of the RCR and OCR markets over the CCR market shows that the market remains heavily characterised by cooling measures and buyer demand continues to gravitate towards affordable and reasonably-priced projects. In 2020, we expect the market trends to be similar to 2020, given that market fundamentals remain unchanged: interest rates are expected to remain low, while the economy is expected to improve slightly in 2020. 
Developers are still expected to price their launches sensitively, given the competition for buyers and the overhang of cooling measures. Though developers are not that threatened by ABSD currently, there are some concerns of sales momentum in 2020 given that the dwindling stock of smaller units while the larger units remain unsold.
Overall prices are expected to grow around 0-3% while rents to grow 1-4% in 2020.


Despite falling retail sales, URA central region retail rents rose by 2.3% q-o-q in Q4 2019. For the whole of 2019, central region retail rents rose by 2.9% y-o-y. Rents in both central area and fringe area also recorded rental increases of 3.3% and 2.7% y-o-y in 2019 respectively. 
The increase in overall retail rents over 2 consecutive quarters could be a sign that the retail market has reached an equilibrium and retail rents should stabilise around current levels, barring any unforeseen circumstance. According to Cushman & Wakefield’s prime retail basket of properties, prime rents across all markets rose in the last quarter of 2019. Orchard prime rents ($35.77 per square foot per month, psf/mo) rose by 0.4%, while Other City Areas ($21.75 psf/mo) and Suburban ($31.76 psf/mo) prime rents registered gains of 0.3% and 0.2% respectively. For the whole of 2019, Orchard rents registered the strongest growth, rising 2.6% y-o-y, while Other City Areas and Suburban prime rents rose 0.8% and 0.2% respectively. The positive rental growth in Orchard was driven by limited supply of new prime retail space amid rising tourist arrivals. Despite slower economic growth, prime spaces continue to enjoy very high or full occupancy rates, allowing landlords to hold rents or even raise rents. 
Incoming retail supply in 2020 is expected to remain relatively low with only 73,000 square metres (sqm) of retail space expected to be completed, less than half of the supply of 170,150 sqm in 2019. New retail supply is expected to stay low over the next 5 years. 
Retail occupancy rates remained healthy at 92.5% in Q4 2019, unchanged from Q3 2019. Notably, Orchard’s occupancy rate fell to 92% as at the end of 2019 from 94.1% as at the end of Q3 2019. 
Strata retail prices in the central region also bucked the trend to rise by 1.8% q-o-q, staging its third consecutive quarterly rise in prices. 
Despite the increases in prices and rents, the retail operating environment remains challenging and its outlook remains mixed. Landlords are still experimenting with concepts which work best while investing in experiences and authenticity that consumers can’t get online. They are increasingly focused on tenants’ retail concepts rather than their ability to pay the highest rent. A few long-time brands such as Cold Stone Creamery, DIY chain Home-Fix and cosmetics retailer Sasa announced store closure in Q4 2019, leading to additional retail space entering the market in 2020. Though we expect the vacancies to be filled up eventually, landlords would be hard-pressed to raise rents further, given the weaker economy and falling retail sales. 
For now, there isn’t any visible catalyst that would spur a strong recovery in retail scene. But retail rents should see support given the limited supply over the next few years. Other City Areas rents could see a marginal decline (-0.5% y-o-y) in 2020, as it is not supported by a large residential catchment and does not attract steady tourist footfall like Orchard Road. Orchard and Suburban rents are expected to see flattish growth in 2020. 

Related Insights

main streets across the world 2023

Main Streets Across the World 2023

In this 33rd edition of Main Streets Across the World, we’ll explore the near-term outlook for the retail sector; headline rent and ranking changes for best-in-class urban locations across the world; key indicators and global main street rankings; and key trends to watch such as the cost-of-living crunch, e-commerce and more.
Dominic Brown • 21/11/2023
Reworking the office
Research • Workplace

REWORKING the Office Asia Pacific

Our ‘REWORKING’ series examines decision-making for occupiers under four key considerations: Cost, Carbon, Culture and Community – under which the changing demands, needs and impacts on office spaces and strategies can be examined.
Grant Carter • 03/11/2023
Insights • Economy

Cushman & Wakefield Comments on URA private residential price index Q3 2023

Overall sales volume declined by 3.5% qoq in Q3 2023, reversing the past two consecutive quarters of increase. The fall in overall sales volume was driven by the new sales market, which declined by 8.5% qoq to 1,946 units in Q3 2023.
Xian Yang Wong • 27/10/2023

Related Stories

Dexcom Philippines New Office Fit-out Project
Dexcom Philippines • Healthcare
Learn More
Cushman & Wakefield Stories Philippines Inc. • Travel
Learn More
Cushman & Wakefield Stories
OMD Philippines • Advertising
Learn More
With your permission we and our partners would like to use cookies in order to access and record information and process personal data, such as unique identifiers and standard information sent by a device to ensure our website performs as expected, to develop and improve our products, and for advertising and insight purposes.

Alternatively click on More Options and select your preferences before providing or refusing consent. Some processing of your personal data may not require your consent, but you have a right to object to such processing.

You can change your preferences at any time by returning to this site or clicking on Privacy & Cookies.
These cookies ensure that our website performs as expected,for example website traffic load is balanced across our servers to prevent our website from crashing during particularly high usage.
These cookies allow our website to remember choices you make (such as your user name, language or the region you are in) and provide enhanced features. These cookies do not gather any information about you that could be used for advertising or remember where you have been on the internet.
These cookies allow us to work with our marketing partners to understand which ads or links you have clicked on before arriving on our website or to help us make our advertising more relevant to you.
Agree All
Reject All