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Rents for office space likely to rise: Report

Posted by Property Launch Invest on Friday, 27 September 2013 in Property News

Office landlords seem to have enjoyed a recovery in this quarter with higher rents on the cards, according to a new report yesterday.

The demand for space is coming from small- and medium-sized enterprises (SMEs), mainly in non-financial industries such as media, information and communications, and businesses in professional and business services.

Another sign of a more buoyant market is seen in the net absorption rate, which increased to about 350,000 sq ft from July 1 to this point in September.

This is double the net absorption recorded for the three months to June 30.

Net absorption is the difference between the amount of space placed on the market and the amount leased.

However, while occupancy rates have increased in most areas due to the greater take-up during this period, the islandwide occupancy rate fell by 1.6 percentage points to 94.6 per cent compared with the three months to June 30.

This was due to the completed Asia Square Tower 2, Metropolis Tower 1 and Nexus @ One North. These buildings added more than 1.4 million sq ft of vacant office stock in this quarter.

More service office operators have been catering to these firms by increasing the available space.

For example, CityHub committed to a new space in Tung Centre in Collyer Quay, and Regus will open offices in the JTC Summit building in Jurong East.

Higher rentals were seen in most areas, particularly in the newer and better quality buildings.

For example, average gross monthly rents in Raffles Place in the CBD are around $9.40 per sq ft this quarter, up 1.3 per cent on the second quarter.

Rates in the Shenton Way, Robinson Road and Cecil Street area rose 3.4 per cent this quarter to $7.50 per sq ft a month over the previous quarter.

Source The Straits Times - 25 September 2013

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PROPERTY LAUNCHES & INVESTMENTS

Property Launches & Investments

Rents for office space likely to rise: Report

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