Singapore’s leasing demand plummets as businesses delay expansion plans

Tenants are flocking to higher grade buildings.

More firms are delaying their expansion goals in view of Singapore’s slowing economy, and it’s taking a toll on the city-state’s leasing demand.

According to a report by Deutsche Asset Management, the financial sector has also contributed to slowing leasing as it continues to tackle restructuring challenges.

Flight-to-quality trends have been observed as tenants attracted to lower rentals relocate to newer buildings with higher grade specifications, the report noted.

“Rental growth and occupancy levels are expected to remain under pressure from the influx of supply,” the report added.

Among the new developments coming onstream in the next 12 months include Marina One and Guoco Tower.