- Long-suffering US office REITs are finally seeing the light at the end of the tunnel. Leasing volume has picked up and tenants are more willing to commit to long-term leases.
- New construction has petered out and occupancy could recover to pre-pandemic levels by 2027. Upcoming rate cuts would support a continuation of the recovery.
- - Read this at SGinvestors.io -
Pick-up in leasing as confidence is restored.
- Leasing volume increased 7% y-o-y and 15% q-o-q in 2Q24, reaching 90% of pre-pandemic levels. Demand bottomed out in 1Q23 and rose steadily over the next five consecutive quarters. Renewals accounted for 45% of leasing volume as tenants avoided incurring out-of-pocket build-out costs. Tenants have shown more confidence in signing long-term leases in recent quarters.
- - Read this at SGinvestors.io -
Reaching a new equilibrium.
- Major tenants have cut office space by an average of 11.4% over the past 12 months when their leases expire. 60% of leases were signed before the COVID-19 pandemic and are subject to future downsizing. Nevertheless, many tenants have reached their targeted office footprint.
- Downsizing has gradually diminished as office space per employee stabilised at 147sf, down 9% from pre-pandemic levels. Some tenants have also started to expand their footprint.
Office construction at historic low.
- Read more at SGinvestors.io.
Above is the excerpt from report by UOB Kay Hian Research.
Clients of UOB Kay Hian may be the first to access the full report in PDF @ https://www.utrade.com.sg/.
Jonathan KOH CFA UOB Kay Hian Research | https://research.uobkayhian.com/ 2024-10-09
Read More Analysis On Singapore REITs (S-REITs):
Analyst Reports on Singapore REIT Sector
Check Out Also The Summary Of:
S-REIT Share Price Performance
S-REIT Target Prices & Ratings
