EDMUND TIE’s comments: URA 3Q 2022 Statistics
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  • 28 October 2022

EDMUND TIE’s comments: URA 3Q 2022 Statistics

SINGAPORE, 28 October 2022 – Mr Lam Chern Woon (蓝振文), Head of Research and Consulting at EDMUND TIE comments on URA 3Q 2022 statistics for real estate.


The private property market performed strongly in 3Q 2022, with prices rising at a blistering pace of 3.8% quarter-on-quarter (qoq), accelerating from 3.5% in the previous quarter. This was led by the non-landed segment where prices rose by 4.4% qoq in 3Q 2022 (vs 3.6% in 2Q 2022). In particular, the non-landed Outside Central Region (OCR) segment saw prices leaping by 7.5% in the quarter, the highest in 13 years since 3Q 2009 when prices rose by 16.1% during the initial Global Financial Crisis recovery pace.

Several suburban project launches such as AMO Residence, Sky Eden@Bedok and Lentor Modern achieved stellar sales performances in the quarter at benchmark prices, contributing to the buoyant price growth in the OCR. The robust take-up in these three projects also contributing to more than a doubling of primary OCR sales from 496 units in 2Q 2022 to 1,244 units in 3Q 2022. In contrast, the other market segments saw a decline in primary sales, especially the Rest of Central Region (RCR) as sales understandably declined following the strong reception to launches in the previous quarter.

The number of launched units fell by 26% in 3Q 2022. Although overall primary sales fell by 8.8% to 2,187 units in 3Q 2022, the take-up rate rose to 150% compared with 123% in the previous quarter, attesting to the unfettered property demand, even amid escalating mortgage rates. The underlying reasons for the sustained demand include healthy labour market conditions, dry powder in the market, and a gravitation towards property as a hedge against inflation given the turbulence in other financial markets. The unabated increases in rents have also attracted property investors.

While sales activity in the primary market is driven largely by launch activity, the slowdown in secondary sales activity does point to more caution among homebuyers in an increasingly somber economic climate. Secondary sales volumes in the first three quarters of this year were 24% lower than the same period last year, weighed down by the Core Central Region (CCR) segment where sales fell 33% as foreign demand has not returned to full force yet.

As at 3Q 2022, there are 15,677 units with planning approvals in the pipeline that are unsold. Including completed and unsold units (100) as well as units without planning approvals (5,721), the total unsold inventory as at 3Q 2022 stood at 21,498 units, a slight decline of 2.7% compared with 22,084 units in 2Q 2022. However, as the pace of primary sales has softened, the demand-supply dynamics is somewhat more balanced. The unsold inventory is now expected to be cleared in 2.3 years as compared with 2.0 years as at 2Q 2022 or 1.7 years as at 4Q 2021.

Rental growth accelerated to 8.6% qoq in 3Q 2022 from 6.7% in 2Q 2022. To-date, rents have increased by 20.8%, exceeding the full year growth of 17.9% recorded in 2010. The to-date rental increase is similar across the market segments and reflect the spate of construction completion delays as well as a greater influx of residents and workers as border restrictions were eased. The overall vacancy rate rose by 0.3% pts from 5.4% in 2Q 2022 to 5.7% 3Q 2022 but remains relatively low from a historical perspective. Supply completions are expected to double from about 8,400 units in 2022 to 18,200 units in 2023. We expect rental growth to persist, albeit at a more moderate pace in 2023 as the backlog of completion delays is cleared.

Looking ahead, we expect primary sales for 2022 to be recorded in the territory of around 8,000-8,500 units, a marked decline from 2021’s 13,027 units. Post-cooling measures, price growth is expected stay positive but moderate. We expect about 9% price growth for 2022. For 2023, primary sales of about 7,000 to 8,000 units is expected while prices could rise by about 1-3%, barring a further deterioration in economic conditions or new cooling measures.



In Q3 2022, the Singapore office market saw an acceleration in office rents amid the tight supply of Grade A office spaces in the CBD coupled with strong demand for quality office spaces. Based on URA’s data, the office rental index in the Central Region increased for the fourth consecutive quarter as office rents in the Central Area and Central Region both saw a 2.1% qoq increase. Notably, the office rental index in the Fringe Area saw a 2.5% qoq increase for the fourth consecutive quarter as well. Despite the continued rise in interest rates and reported layoffs in the tech and e-commerce industries, leasing demand for office spaces across the board is underpinned by co-working operators looking to ink longer term leases for large spaces in key office addresses, both in the CBD and in the Fringe Area, as well as the unabated inflow of new family offices. Singapore remains an attractive entry point and springboard for firms looking to expand into the Southeast Asia market.

As buildings like the former Fuji Xerox Towers and AXA Tower undergo redevelopment, the resulting tenant displacement and tight office supply have supported office rents through the pandemic and even now into the post-pandemic. However, with the recent completion of Hub Synergy Point, upcoming completions in 2023 such as IOI Central Boulevard Towers and Guoco Midtown office spaces, the increase in supply of office spaces in the coming year will see competition amongst the new buildings as they look to firm up on leasing deals.

Office occupancy rates in Q3 2022 saw sustained increases especially in the Central Region. The islandwide office occupancy rate increased by 0.3% pts to 88.3%, with office buildings in the Central Region reaching an occupancy rate of 88.7% and other office buildings at 84.0%. Based on EDMUND TIE’s research, Grade A office spaces in the CBD saw a high 96.1% occupancy rate as compared to occupancy rate of 87.8% across all grades in Downtown Core, indicating occupiers’ preference for quality office spaces. Net absorption for office buildings in the Central Region remained positive at 15,000 sq m, albeit a drop from the previous quarter (24,000 sq m). Net absorption for office buildings in Downtown Core saw a second consecutive quarter of increase at 17,000 sq m, up from 11,000 sq m in Q2, reflecting strong leasing demand for offices in the CBD.

Based on URA’s data, prices of office spaces in the Central Area and Central Region saw a second quarter of decrease, with a 4.1% and 2.7% qoq fall from the previous quarter respectively. Prices of office spaces in both the Central Area and Central Region are at its lowest since Q4 2010. 

Overall, office rents are expected to continue its positive momentum as the rental recovery is entrenched, although the pace of recovery will moderate next year due to economic headwinds, rising business caution and greater office supply coming onstream. Office rents in the CBD are likely record a 3-7% growth in 2022, before moderating to 2-5% growth in 2023.



Overall retail demand continued to strengthen for the second consecutive quarter. In 3Q 2022, the islandwide net absorption recorded 323K sq ft, a four-fold increase from 86K sq ft registered in the previous quarter. The pick-up in demand was largely broad-based across all segments, with the exception of Fringe Area recording a negative take-up. The Outside Central Region recorded the strongest improvement, while within the Central Region, the Orchard Area outperformed. The further easing of community and border measures that occurred in end-August, which included the removal of legal requirement for mask-wearing in most settings, as well as the removal of the seven-day SHN requirement for all non-fully vaccinated incoming travellers, have largely aided in the further recovery of the retail market.

With demand outpacing supply, the overall vacancy rate dipped slightly by 0.4% pts to 7.8% in 3Q 2022 from 8.2% in the previous quarter, and it was the lowest level recorded since the start of the pandemic in early 2020. Retail vacancy rates have been largely easing since the start of the pandemic and are gradually inching closer to pre-pandemic’s level of 7.5% (4Q 2019). While vacancies were unchanged in the Outside Central Region, all other areas experienced fall in vacancies, with the Orchard Area recording the sharpest decline among the various subzones due to buoyant leasing demand. Recent openings such as Puma’s largest outlet opening at 313@Somerset, and new entrants such as Ginza Xiaoma and Kydra launching physical stores in Ngee Ann City, Norqain in Wisma Atria, and & Other Stories at Ion Orchard. The Orchard Area’s outperformance was unsurprising as the Great Singapore Sale (GSS) and various keynote events that were held during the same period, such as the Formula 1 Singapore Airlines Singapore Grand Prix 2022, Forbes Global CEO Conference and Milken Institute Asia Summit have supported the continual rise in tourist arrivals and the resultant high footfalls witnessed at malls in the tourism-dependent area.

The financial metrics of the retail market painted a more lacklustre picture however. Both the Central Region’s prices and rents declined by 3.2% qoq (previous -1.2% qoq) and 0.4% qoq (previous 0.5% qoq) respectively in 3Q 2022, a continuation from their downward trends experienced in the previous quarter. Retailers are understandably cautious on overcommitting to high rents in this sombre climate, although we observed that rental recovery is already in place for prime Orchard and suburban malls.

As at 3Q 2022, the total retail space projected to come onstream stood at 5.2 mil sq ft (gross), or approximately 8% of existing stock. The pipeline expected from 2022 and beyond remains tight, with the majority of the upcoming pipeline emerging from the Fringe/Suburban Areas. In addition, the pipeline mainly comprises of the enhancement of existing malls and ancillary retail, mainly from new hotel developments and mixed-use office buildings.

Against the backdrop of an increasingly competitive retail landscape posed by the popularity of e-commerce platforms and rise of social commerce, retailers have been developing enhanced shopping experience such as introducing short-term concept pop-up stores, creating interesting collaborations between different complementary retail sectors and providing a more personalised in-store shopping experience. For example, Zalora have launched a supermart-style pop-up shop with Adidas in early August at Bugis Junction, while Lancome’s Beauty Tech Flagship pop-up was held outside Mandarin Gallery in the same month. Recent pop-ups include the Chanel J12 pop-up at Ngee Ann City in September and Prada Paradoxe pop-up at Paragon in October.

Landlords have seized the opportunity to conduct timely renovations and facelifts for their malls and/or refresh their tenant mix offerings so as to stay relevant and attract shoppers to physical spaces. For example, Palais Renaissance had officially reopened early this month with the introduction of new dining concepts and enhanced layouts. In addition, enhancements to retail assets include the announcement of the revamp of *SCAPE in Orchard and repositioning of CQ @ Clarke Quay, both announced in July.

The retail sector is set to witness further growth trajectory in the endemic era. Exciting transformations to the traditional physical retail landscape are also anticipated, as retailers continue to bring cohesion between the online retail experience and in-store experience. The updated Retail Industry Transformation Map 2025 which focus on local brands, innovation, talent, is anticipated to pave the way for innovation in the retail scene.

However, we take caution that the considerable headwinds going forward such as high inflation and uncertainties such as possible emergence of new Covid variants as well as any retightening of safety or border measures may affect retail sentiment and consumer confidence, which may likely cap consumer spending and put a lid on retail rental growth.

We expect Orchard rents (prime first storey) to lead the market recovery and clock around 10% rental growth this year, while other segments are poised for between 3-8% rental growth in 2022. For 2023, keeping in mind the significant cost pressures and headwinds, we expect lower rental growth of between 8-9% for Orchard (prime first storey), and between 3-6% rental growth for other segments.



For further information, please contact:

Seah Li Ching (Ms)

Corporate Communications

DID: +65 6393 2369

Email: liching.seah@etcsea.com

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