Office rents may be on an upward trend, but experts say that they will rise at a more moderate pace.
In a report out Wednesday CB Richard Ellis (CBRE) said that prime rents averaged S$8.60 per square foot per month in the first quarter of 2011.
This reflects a more moderate quarter-on-quarter increase of 3.6 per cent in comparison to the 7.2 per cent increase in Q3 and 12.2 per cent in Q4 of 2010.
CBRE added that in terms of occupancy levels the quarter saw mixed performances for the various micromarkets.
Vacancy rates in the central business district and decentralised markets rose.
The decenteralised markets saw a nominal increase from 5.1 per cent to 5.2 per cent this quarter.
Going forward, CBRE estimated that 40 per cent and 61 per cent of the future 2011 and 2012 supply has been pre-let.
As some developers have rescheduled their projects, there is a more even spread of new supply over the next five years.
Moray Armstrong, executive director of Office Services at CBRE said; “Greater certainty about supply beyond 2014 has also started to emerge with the groundbreaking of a number of sites such as South Beach, one- north and Peck Seah/Choon Guan Street in Tanjong Pagar. The market eagerly awaits the unveiling of firm plans for M-S Limited’s sites at Ophir Road and prime Marina Bay.”
Mr Armstrong added that the outlook for the market remains stable, and CBRE expects rental growth of between 10 per cent and 12 per cent for full year 2011.
Source : Channel NewsAsia – 30 Mar 2011