1.

According to the Colliers International Property market report, the commercial investment sales market gathered momentum in the first part of 2008, chalking up some $3.22 billion worth of transactions in the March quarter. This was an encouraging 42.9% higher than the $2.26 billion recorded in the preceding quarter.

In a survey by CB Richard Ellis (CBRE), Singapore ranked 15th in the world for most expensive office rent as of May 2009. The Republic ranked 9th in the 2008 survey and has fallen by 6 positions since. The May 2009 survey ranked Tokyo (Inner Central), London (West End), Moscow and Hong Kong as the top four most expensive markets in the world. Considering Singapore's development and services as a country, the property markets are incredibly competitive.

3.

Grade A office vacancy rose from 4.2% in Q3 2009 to 6.2% Q4 2009. It was 0.9% in Q4 2008. This increase in vacancy was largely due to the completion of a new development 71 Robinson Road and masked the fact that the Grade A sector has enjoyed improved leasing activity as well as a flight to quality.

4.

Due to the improvement in leasing demand, the slide in office rents slowed to 0.4% at the end of 2009. The average office rental was S$6.29 per sq ft per month during the period.

5.

According to CB Richard Ellis, new malls totaling about 1.7 million sf were completed in the first three quarters of 2009. About 39 per cent of these spaces were in Orchard Road, debuting on the heels of the completion of STB’s $40-million makeover of Orchard Road. Tampines 1, Yew Tee Point, City Square Mall and Iluma rose in the suburban and City Fringe areas, bringing many new-to- market labels to the heartlands.

6.

Although demand for office space is strengthening, the large influx of new supply is expected to put further downward pressure on rents this year. Demand for Singapore CBD office space has been driven by i) banks and financial institutions expanding private wealth management services in Asia ii) low vacancy rates for office space supply in the Singapore commercial property market.

7.

The Urban Redevelopment Authority (URA) introduced a new type of zoning - the White Zone - which allows for the development of a variety of different uses like commercial, residential and hotel within the zone. This gives the market greater flexibility and creativity in planning for developments that provide a mix of uses like residential and retail. Today, several successful and innovative developments have been built on white sites. For example, Central at Clarke Quay, built on a white site, is not only a busy shopping centre, but also pioneers the ‘Small Office Home Office’ concept here in Singapore by offering custom-built offices that function as residential units as well.

In summary, the Singapore commercial property market will not avoid the negative effects of the global economic downturn. A rise in grade A office supply will likely lead the reduced rental prices. But relatively low vacancy rates and its strengths as a regional business hub will help Singapore maintain competitiveness.

For further information on the Singapore commercial property market, call our Singapore office at (+65) 67350120 or contact us at email@healyconsultants.com