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

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

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.

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. 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.