Prime Orchard road rent continue to fall but post healthy pre-commitment levels

Property consultancy CB Richard Ellis said on Monday that prime Orchard Road rents averaged S$32.90 per square foot in the third quarter, down three per cent from the second quarter.

For the full year, CBRE said it expects Orchard Road rents to fall between 10 and 12 per cent, and a further decline is not expected to exceed five per cent next year.

This means the eventual rental trough should not be less than the S$30 per square foot per month level.

The last time prime Orchard Road rents fell below S$30 per square foot per month was from 1998 to mid-2000, when the effects of the Asian Financial Crisis were most felt.

However, CBRE said leasing activities for new Orchard Road space have stabilised and pre-commitment tenancies remain strong.

Mandarin Gallery is almost 100 per cent occupied ahead of its pre-Christmas opening.

Knightsbridge announced that it is 50 per cent pre-committed and expects the remaining leases to be finalised by the third quarter of this year.

TripleOne Somerset is 60 per cent pre-let while across the street, 313@Somerset announced that it is 90 per cent leased ahead of its late-November opening.

Source : Channel NewsAsia – 14 Sep 2009

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