OUE Commercial REIT - Annual Report 2021

SINGAPORE CBD OFFICE MARKET Stock As of end-2021, there was an estimated 32.1 million square feet (“sq ft”) of investment grade office space in the Central Business District (“CBD”). This accounted for 64.1% of the island-wide investment grade stock of 50.1 million sq ft. New completions in 2021 include Afro-Asia in 2Q 2021 and the office component of CapitaSpring in 3Q 2021. Refurbishment works at 21 Collyer Quay were also completed in 3Q 2021. However, these additions to the stock were largely offset by the withdrawal of Fuji Xerox Towers and AXA Tower for their impending redevelopment. Net Supply, Demand and Occupancy The recovering economy, the smooth roll-out of the national vaccination programme and Singapore’s transition to living with endemic COVID-19 bolstered occupier confidence in 2021 and encouraged an increasing number of companies to plan ahead for business growth. Office leasing activities were however uneven, with the newer, greener and better-quality assets more sought after than others given the heightened importance of sustainable workplaces and employees’ wellness and health. Accordingly, healthy take-up rates were achieved for newly completed projects and good- quality developments where space had been given up by tenants as they relocated or rationalised their requirements. Overall, full-year 2021 physical net absorption in the CBD was weighed down by the ongoing COVID-19 related challenges in the construction industry that hampered numerous occupiers’ plans to move into their new premises in 2021. The impending redevelopment of Fuji Xerox Towers and AXA Tower also saw some tenants relocating out of the CBD due to a lack of replacement premises at suitable price points. As a result, occupancy rate in the CBD fell by 1.8 percentage points (“ppt”) YoY to 91.4% as of end-2021 despite healthy leasing activity. 02 Source: JLL Research, 4Q 2021 *The historical average net new demand is based on data from 2012 to 2021 02 CBD Office Net Supply, Demand and Occupancy (%) 2016 2014 2015 2012 2013 Net Supply (LHS) Net Demand (LHS) Historical Average Net Demand (LHS) Occupancy (RHS) 2021 2019 2020 2017 2018 2024F 2022F 2023F 2.5 2.0 1.5 1.0 0.5 0 -0.5 -1.0 (million sq ft) 0.7 million sq ft* 98 96 94 92 90 88 86 84 53 A N N U A L R E P O R T 2 0 2 1