Office, warehouse rentals getting more expensive

The Republic has moved up two notches to rank seventh in a list of the world’s most expensive office locations as of June, its highest ranking in two years.

It is also the world’s sixth most expensive warehouse location as of June, up from seventh position in December, according to two surveys by Colliers International released yesterday.

Data shows that rental growth for Grade A offices in the Central Business District (CBD) have moderated somewhat to 18.4 per cent (in US$ terms) during the first half of the year from 26.6 per cent in the second half of last year.

Nevertheless, with an average annual gross rental of US$87 (S$110) psf in the first half for Grade A CBD office space, Singapore climbed two notches from ninth place on the list only six months ago.

Hong Kong is the most expensive office location, with Grade A CBD rents climbing 11.3 per cent to US$213.70 psf per annum in the six months to June.

Meanwhile, CBD Grade A occupancy rates in Singapore slipped to its lowest level in six quarters to 92.6 per cent in the third quarter from 93.5 per cent in the second quarter. Overall, CBD Grade A office rents crept up by 2 per cent in the third quarter to S$9.08 psf per month.

On the warehouse front, rents in Singapore rose 12.4 per cent to US$18.57 psf per annum in the first half, marginally lower than Hong Kong’s US$18.97 psf per annum. Warehouse rents were higher only in Tokyo at US$22.81 psf per annum.

Source : Today – 20 Oct 2011

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