At least half of the major foreign international banks in Singapore have either reduced the size of their office space in the last year and a half, indicating that office space vacancy in the city will continue to rise this year with the global economy hitting a rough patch.
Real estate services firm JLL estimates that prime office rents could fall between 10 per cent and 20 per cent this year. The rates had dropped 15 per cent in 2015.
Nicholas Mak, executive director at SLP International Property Consultants, told Reuters that office vacancy rates could hit 13.5 per cent this year.
"Many people thought that this is the new boom, let's try to capitalise on it. Nobody expected the party to end by end of 2015," he told the agency.
Large job cuts in international banks have directly affected the office vacancy rates in the city, which is a financial hub for the region. Singapore is ranked the eleventh most expensive in the world to rent top quality offices.
Adding to the problem of oversupply, many top dollar projects are nearing completion. The construction of GuocoLand Ltd's 64-floor block tower is one such key project that gets completed even as the economy slows down.