Singapore office market now 'cold'
The office property market in Singapore has lost its investment appeal, according to the latest quarterly DTZ Fair Value Index (FVI).
The index revealed that demand for office space has gone from "hot" in Q2 to "cold" in Q3.
"Singapore has traditionally been a volatile office market, and our rental outlook has been impacted by the global slowdown, resulting in lower expected returns over the next five years," said DTZ.
The consultancy has also lowered its industrial rental forecasts to 3.1 percent per annum and 2.3 percent per annum for 2012 and 2016 respectively.
Meanwhile, the Asia Pacific all-property DTZ Fair Value Index (FVI) declined from 70 in Q2 to 58 in Q3, mainly attributed to changes in all sectors, with office values falling to 57 from 69, retail values dropping to 60 from 70 and industrial values to 61 from 72.
While the score indicates that Asia Pacific markets are holding up, the decrease reflects the impact of a softening global economic outlook due to the ongoing European debt crisis.
"The market outlook has become more challenging this quarter with the drop in the Fair Value Index score reflecting the impact of the ongoing European debt crisis," said Chua Chor Hoon, Head of Asia Pacific Research at DTZ.
"Asia Pacific all-property rental growth is expected to outperform global rental growth in 2011, although forecast growth of 6.3 percent this year is slightly down from last year's figure of 6.8 percent. This is still comfortably above the global growth figure of 2.7 percent."For the latest property news, trends, resources and expert opinions, visit our property news section. Home buyers, sellers or property renters looking for a Singapore property may like to visit http://www.propertyguru.com.sg today.
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