The second quarter of 2018 continued to witness a rise in the wave of condo units completed with supply on-track to exceed 20,000 units by the end of 2018.
Growth in new supply is placing growing downward pressure on condo rents. By the end of Q2, asking rents in the mid-range segment witnessed a steep decline of 12% q-o-q, whilst in the high-end segment rent fell 5% q-o-q.
The office market remained robust during the second quarter of 2018, with occupancy reaching a new peak of 87.7%. Quoting rents for Grade-B offices in the CBD increased by 6% q-o-q, while Grade-C rents saw a growth of 3.4% q-o-q. Quoting rents for office space in non-CBD locations remained stable over the course of Q2 2018.
As the office market continues to modernize, some aging buildings are starting to close or undergo renovation in order to provide a higher level of specification and service required to compete for tenants. Over Q2, total supply dropped by 3.3% compared to the previous quarter due to this trend.
During this quarter, three retail complexes were completed and retail supply grew by a remarkable 43% q-o-q. Japanese developer AEON led the pack, delivering approximately 85,000 sqm of retail space based on gross lettable area. Vacancy in the retail sector dropped sharply to below 10% as of Q2 2018, helped by strong pre-leasing activity by AEON, whilst quoting rents for retail complexes witnessed no significant change over the second quarter.