The office market ended 2017 on a high note; islandwide office net absorption as tracked by CBRE Research was 783,621 sq. ft. in Q4 2017, contributing significantly to a full year net absorption figure of 2,069,716 sq. ft. While these results are encouraging, it is important to note that this growth in deal volume was not broad-based and was predominantly driven by a few select sectors namely technology and co-working. At a broad economic level, the changing profile of occupier demand is not surprising and is a reflection of the way Singapore’s economy is evolving.
That said, going forward, there is reason to believe that there is potential for a return to expansion mode for a wider range of industries. The banking sector looks to have turned a corner after a period of slow growth while the oil & gas industry has stabilised on the back of recovering oil prices and improving demand. Only prospects for the legal sector look relatively muted in the near term as the sector adapts to an increasingly competitive market and a complex operating environment. An improving global economy alongside the successful implementation of key government initiatives could help pave the way for more sustainable growth and lend support to a much stronger office recovery story.