Office spot rents likely to plateau in 2020
An influx of family offices could keep rental growth flat.
Rents for office spots are likely to weather down in the year 2020, according to a report by Jefferies.
Although office rents grew by 1% in Q3 YoY due to tech and coworking demand, growth is still in the diminishing trend compared to the 5.4% average growth in the prior quarters in 2019, noted the report. Jefferies believes that a decreasing coworking demand, a shift to non-CBD location, and the influx of family offices will cause office rents to be flat-to-negative in 2020.
Rents for the retail sector are also projected to be in the downward trend for the year. Vacancy rate posited a decrease in Q3 2019, sliding from 9.5% in Q1 of 2019 to 9.1% in Q3, and is expected to spill over to 2020.
Compared to retail, hotels in Singapore are faring better. As supply tapered and more leisure demand was generated via the boost from the MICE segment, hotel RevPAR went up 21% in November from the same period last year. Jefferies sights that this trend is likely to continue to 2020.