Office rents fall at slower pace in Q3 2009

Office rents in Singapore fell for the fourth straight quarter with prime rentals averaging at S$7.50 per square foot a month in the third quarter of 2009.

Real estate consultancy firm CB Richard Ellis said this is a 12.8 per cent on-quarter drop – an improvement over the 18 per cent decrease a quarter ago.

Grade A office rents fell about 13 per cent on-quarter to S$8.80 per square foot per month. Overall, prime rents have fallen 53.4 per cent since the peak in the third quarter of 2008.

Nonetheless, CBRE said the pace of rental decline has eased as business confidence returns gradually. The firm added that the office leasing market was particularly active in the third quarter due to better economic outlook.

CBRE said Grade A vacancy rose to 4.2 per cent in the second quarter of 2009, compared to 3.6 per cent in the previous quarter.

The islandwide take-up of office space was negative 570,000 square feet for the first half of the year.

CBRE said demand for office space is likely to remain in the negative territory for the rest of 2009. It also expects vacancy rates to stay in the double-digits over the next couple of years.

Source : Channel NewsAsia – 17 Sep 2009

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