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- Singapore office, retail rents to see strong growth over next few years: report
Singapore office, retail rents to see strong growth over next few years: report
By Rachel Mui, Business Times / 07-Feb-2018
SINGAPORE'S office rental growth is likely to see the strongest overall growth over the next three years, according to M&G Real Estate's latest market outlook on real estate in the Asia-Pacific region.
M&G expects rental growth in Singapore offices to rise at 6 per cent per annum over the next three years, driven by a medium-term grade A supply drought.
Similarly on the retail front, retail rents in Singapore should start to rise by around 1.5 per cent per annum, as both tourism spending and domestic consumer sentiment improve in 2018, M&G said.
"In addition, the positive effects of residential en bloc sales may boost further consumer spending, as sellers cash out and redeploy this money elsewhere," the global property investor said.
It noted however that a potential goods and services tax hike in 2018 or 2019, estimated at 9 per cent by analysts, could restrain spending initially as consumers adjust to this new level.
Lastly, organic growth from e-commerce, coupled with retailers expanding their omnichannel efforts, should drive healthy demand for logistics warehousing, and support stable rental growth in the region, M&G noted.
That being said, there may be some markets that need time to work through existing or new logistics supply where completion levels are high, such as in Singapore and Osaka.
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