Grade A office properties command respectable take up rates

Grade A office properties in the Marina Bay and Raffles Place vicinity have been commanding respectable take-up rates.

Overseas Union Enterprise’s OUE Bayfront, which obtained its temporary occupancy permit (TOP) in January, has committed leases of 77 per cent of its 500,000 square feet of net lettable area.

OUE said that its latest tenants include international law firm Hogan Lovells International and Union Bancaire Privee.

Just across the road, Ocean Financial Centre Phase 1 has an occupancy rate of 82.6 per cent. The building received its TOP in April and has 850,000 square feet of office space.

“It would have been easy for these buildings to rent out all its space but the issue here is to maintain its rents at a certain rate,” said Donald Han, vice-chairman, Cushman & Wakefield, adding that the rents in these buildings are likely to “cross S$13 per square foot”.

Mr Han also said that so far, office rents have grown about six per cent per quarter. He expects this to slow to three to four per cent as tenants move to newly completed buildings in the Marina Bay area, resulting in vacancies in older ones.

With more office space coming up around the Marina Bayfront area some wonder if older buildings around Raffles Place could see tenants migrate.

For now, though, this seems unlikely.

“Raffles Place will still hold its own. This is because of the clustering effect there, transportation and its reputation,” said Nicholas Mak, executive director fo research & consultancy at SLP International.

Source : Channel NewsAsia – 26 Jul 2011

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