OFFICE rents in Singapore’s central business district (CBD) fell by 3.9 per cent in the first quarter of this year from the previous quarter – their third straight quarterly decline – as concerns over a global economic slowdown dampened demand for office space.
Office rents fell to S$9.90 per square foot (psf) per month in Q1 2016, according to DTZ Southeast Asia, which is expecting them to continue dropping due to weak demand and substantial office space coming on stream.
The sluggish global economy has affected demand for the business services sector, a major office user, and also led to a contraction of the financial services sector, it observed.
Marina Bay office rents were the most affected, decreasing 5 per cent to S$11.90 psf per month, while Grade B offices in the Shenton Way and Tanjong Pagar area fell 4 per cent to S$7.30 psf per month.
Raffles Place rents proved the most resilient, slipping by a smaller 2.3 per cent to S$10.50 psf. The high occupancy rate of 97.4 per cent and the lack of new supply helped to mitigate the downward pressure there, said DTZ.