Office market averts overheating: Colliers

Singapore’s office property market appears to have averted an overheating situation, with office rents in the second quarter growing at a single-digit pace amid the continued easing of occupancy rates, real estate consultancy Colliers International said on Tuesday.

Average monthly gross rents of islandwide Grade A office space in Singapore recorded the third consecutive quarter of moderation in quarter-on-quarter growth at 6 per cent. In particular, average monthly gross rents of Grade A office space in Raffles Place and the New Downtown grew by 7 per cent to reach s$10.40 per sq ft (psf) per month. This is slightly less than the eight per cent gain recorded in the first quarter this year.

The office market is experiencing a rising supply of space stemming from the gradual completion of new office developments, Colliers noted. As landlords continue to raise asking rents to leverage the up-cycle in the office property market, they are finding increasing resistance from prospective tenants. The widening gap in rental expectations has in turn contributed to a moderation in the leasing exuberance.

Still, Colliers said the office sector would continue to be supported by drivers such as the banking and professional services sectors, where corporate hirings are likely to continue to grow.

Source : Today – 29 Jun 2011