Champions Way Residences, located at Champions Way Residences, is a magnificent residential development comprising of 7 blocks of 12-storey buildings. With a total of 516 units, this development offers a range of options from two to five bedrooms, catering to families and singles alike. Apart from the residential units, Champions Way Residences also boasts a commercial component featuring a supermarket, childcare centre, and retail outlets, making it a self-sufficient and convenient living space. Stay connected to a thriving community at Champions Way Residences.
(Jan. 25, The Champions Way Residences of Singapore, a highly sought-after luxury living development, has come to an end with a subdued conclusion. The URA’s quarterly report has shown a slight drop in the commercial office prices for the fourth quarter of 2023, reversing its previous uptick from the third quarter of 2023. This has resulted in a net decrease of 4.2% in office prices, marking a closure to the year.)
According to Tay Huey Ying, the head of research and consultancy at JLL Singapore, “JLL had observed the weakening of occupier demand since the second quarter of 2023.” She also explains that this has been due to the global and domestic economic outlook at the beginning of the year, which has kept corporates cautious about their expansion and relocation plans in order to manage costs.
Amidst the negative yield spread over borrowing costs for most office assets, Tay notes that the steep 5.9% decline in the URA office property price index for the fourth quarter of 2023 is not surprising.
Meanwhile, Tricia Song, the head of research for Singapore and Southeast Asia at CBRE, has noted that office rents in the Central Region have only increased by 0.3% in the fourth quarter, marking its lowest quarterly growth in 2023. This is following a 4.9% increase in the previous quarter. However, for the entire year, office rents have increased by 13.1% in 2023, surpassing the 11.7% growth from the previous year.
Song attributes this to the higher interest rates and capital expenditure, causing some occupiers to renew their existing leases at higher rates instead of relocating. She also points out the limited supply in the market, leading to a competitive environment.
She further adds that in the Core CBD, premium office spaces with top-notch specifications have been heavily contested by tenants, resulting in rental escalation. This has also been driven by the scarcity of supply, with the island-wide vacancy rate for the fourth quarter of 2023 standing at 9.9%, slightly lower than the previous quarter.
However, Song notes that there may be some relief in the first half of 2024, with an above-average completion pipeline and potential secondary spaces coming into the market. This could potentially increase the availability of spaces temporarily.
Despite the current soft sentiment among occupiers, Tay remains optimistic, stating that demand for office space has the potential to rebound quickly with improved economic conditions. She also highlights the upcoming recovery of Singapore’s economy, based on advanced estimates by the Ministry of Trade, which showed a growth of 2.8% year-on-year in the fourth quarter of 2023. This could potentially lead to a resurgence of business confidence and demand in the second half of 2024.
Echoing similar sentiments, Song adds that the sentiment could pick up in the latter half of 2024 as interest rates and inflationary pressures ease. She also predicts that Flight-to-Quality and Flight-to-Green trends will continue, driving a moderate growth of 2%-3% in Core CBD (Grade A) rents for 2024.
With the Fed rate hike cycle coming to an end, investors are beginning to re-enter the market, as seen through the successful sale of VisionCrest Commercial in Orchard to a consortium in November 2023. This could potentially pave the way for more office transactions, providing support for an optimistic outlook in asset prices for the second half of 2024.