URA Whets Appetite of Developers with Prime CBD Office Site in Singapore

A Potential Shortage on the Horizon for Singapore’s Core 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.

Implications for Landlords and the Market

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.

Supply Crunch and Competitive Concerns

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

Urban Redevelopment Authority (URA) data released on Jan 24 showed that the vacancy rate for Category 1 offices – which cover the better-quality buildings in the city area – started to trend down in the fourth quarter.

Conclusion

A potential shortage of Core CBD Grade A offices in Singapore may have significant implications for the country’s competitiveness. With no new significant supply in sight, landlords may benefit from the situation, but the overall market may struggle to meet the demands of businesses and professionals.

FAQs

Q: What is the projected supply of Core CBD Grade A offices in Singapore?

A: According to property consulting group CBRE, no new significant supply in this segment is slated for completion over the three years from 2025 to 2027.

Q: How will the potential shortage affect landlords?

A: The potential shortage may benefit prime CBD office landlords, as they will have less competition for tenants.

Q: What does this mean for Singapore’s competitiveness?

A: A severe supply crunch of Core CBD Grade A offices may have implications for Singapore’s competitiveness, as the country struggles to meet the demands of businesses and professionals.

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