Office rentals in Singapore suffered their sharpest quarterly drop since 2000 in the final three months of last year.
A research report from property consultancy CB Richard Ellis (CBRE) said Grade A office rents fell 20 per cent on-quarter in the fourth quarter of last year, to an average of S$15 per square foot.
Average office rents stood at some S$13 per square foot, down 14 per cent from a year earlier.
CBRE expects rents to continue to fall throughout this year. It said the environment will be highly competitive and lease negotiations will be vigorous.
As for the retail sector, prime Orchard Road rents slipped 1.9 per cent on-quarter to S$36 per square foot. This was the first time they had fallen since 2003.
Prime suburban rents dipped 1 per cent to an average of S$29 per square foot.
CBRE said given the weak demand and the abundant retail supply that will come on stream in the next two years, prime Orchard Road rents could fall by 10 per cent in the first half of this year.
Suburban malls may see a rental consolidation of 2 to 3 per cent.
Source : Channel NewsAsia – 26 Feb 2009