Prime office rental rates set to keep rising

Rents in the prime office area of City Hall, Marina Centre and Bugis have climbed by 6.6 per cent since last month, say property consultants Cushman & Wakefield.  

The second-highest rise recorded in the same period was in the Orchard Road and Scotts Road area, with rents climbing by 4.7 per cent.  

But the highest rentals in dollar terms are to be found in Raffles Place, where they have climbed 4.3 per cent since last month Achievable net effective rents in that area are now US$57.95 ($89.84) per sq ft a year — the highest in the office district.  

This is a 78.1-per-cent rise from when it bottomed out in August 2004.  

The third-highest rents are to be found in City Hall, Marina Centre and Bugis, which can command rents of US$54.56 psf per year.  

The Golden Shoe area, adjacent to Raffles Place, has the lowest net achievable rents of US$45.53 per sq ft per year.  

According to the Cushman & Wakefield, office rents look set to rise further in the short term due to the continuing crunch in prime office space with rentals for prime office space averaging $7.06 per sq ft (US$54.08 per sq ft per year) last month.  

According to the Urban Redevelopment Authority, the Central Region saw a 3.2-per-cent rise in price and a 7.2-per-cent rise in rentals in the third quarter.  

Meanwhile, vacancies of private offices fell from 12.9 per cent in the second quarter to 10.6 per cent in the third quarter of this year.  

Source: TODAY, 25 November 2006

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