URA should whet the appetite of Singapore developers with a prime CBD office site

A Potential Shortage Looms for Singapore’s CBD Grade A Office Market

A POTENTIAL shortage may be on the horizon for Singapore’s Core Central Business District (CBD) Grade A office market.

No New Significant Supply in Sight

Following the completion of IOI Central Boulevard Towers (IOICBT) in 2024, with 1.26 million square feet net lettable area of offices, no new significant supply in this segment is slated for completion over the three years from 2025 to 2027, according to property consulting group CBRE.

A Supply Crunch Could Impact Competitiveness

That seems like good news for Singapore’s prime CBD office landlords such as Keppel Real Estate Investment Trust, Hongkong Land and CapitaLand Integrated Commercial Trust, among others.

However, a severe supply crunch of Core CBD Grade A offices may have implications for Singapore’s competitiveness.

A Recent Supply Overhang

For most of last year, there was a supply overhang in the Singapore office market, mainly due to IOICBT’s completion. By mid-December, however, 75 per cent of the project’s office space had been committed.

Conclusion

The potential shortage of Core CBD Grade A offices in Singapore could have significant implications for the country’s competitiveness. With no new significant supply in sight, landlords may benefit from a supply crunch, but the long-term effects on the market remain to be seen.

FAQs

Q: What is the current supply situation in the Singapore office market?
A: The current supply situation in the Singapore office market is characterized by a recent supply overhang, mainly due to the completion of IOICBT.

Q: What is the expected supply of Core CBD Grade A offices in the next three years?
A: According to CBRE, no new significant supply of Core CBD Grade A offices is expected to be completed over the next three years, from 2025 to 2027.

Q: Who may benefit from a supply crunch in the Singapore office market?
A: Prime CBD office landlords such as Keppel Real Estate Investment Trust, Hongkong Land and CapitaLand Integrated Commercial Trust, among others, may benefit from a supply crunch in the Singapore office market.