Office Rents in Singapore - nearing peak

Straits Times today reported that CB Richard Ellis (CBRE) report said the impact of the United States sub-prime crisis, rising inflation in Singapore and more modest economic growth have dampened the office sector and slowed rent rises.

Rents of top office buildings rose 9.6 per cent in the first half compared with 96.5 per cent in the whole of last year. Such Grade A rents averaged $18.80 psf a month in the second quarter, up from $18.65 in the first period. The vacancy of Grade A space - now 0.6 per cent - will remain tight as no new top-grade office developments will be completed before the second half of next year.

While office rents may have peaked, they will probably stay at the current levels for the next 12 months given tight supply. And the search for lower-cost space continues. There is heightened interest for upcoming space in the Alexandra and Harbourfront areas.

There will be about 10.2 million sq ft of new space coming on stream between now and 2012, with the bulk likely to be ready in 2010 to 2011, said CBRE. About 63 per cent of this will be in Grade A properties in the core downtown area.

Still, the supply should be viewed in context with the strong take-up rate, said CBRE. About 22 per cent of known supply from now to 2012 has already been pre-committed.

Source PropertyHighlightsOfSingapore via Strait Times.
Image Source PYGMY.
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