Singapore prime office rents stay stable

Property consultant Colliers International has released research reports covering industrial, investment sales, office and the retail space in Singapore for the second quarter of the year.

In the office space sector, Colliers said competition for tenants kept the rental growth of Grade A office space within the single-digit territory.

In the Raffles Place and New Downtown micro-market, monthly gross rents of Grade A office grew by 7 per cent on quarter to reach $10.40 per square foot. This is a little slower than the 8 per cent gain recorded for the first quarter.

The overall average occupancy rate for Grade A office space in the Central Business District (CBD) also continued to dip to 93.5 per cent in 2Q 2011, following its first correction in six quarters in 1Q 2011 when it slipped 0.1 percentage point to 94.2 per cent.

Meanwhile, in the industrial property market, the second quarter saw a pick-up after a temporary lull in the first quarter.

Colliers added both the sale and leasing markets experienced a flurry of activity.

The average monthly gross rentals for prime factory and warehouse spaces surged by 6 per cent to 7 per cent on-quarter, their fastest quarterly growth in three years.

Colliers noted that at end June 2011, prime ground floor factory and warehouse space were commanding average monthly gross rents of $2.25 per sq ft and $2.34 per sq ft respectively.

The second quarter saw the value of total investment sales sector amount to $9.82 billion, down 1.6 per cent from 1Q 2011.

Sales continued to be dominated by the private sector, which contributed to 52.4 per cent of all investment sales, while the public sector accounted for the remaining 47.6 per cent. However, private sector deals fell by 22 per cent on a quarter-on quarter basis to around $5.15 billion in 2Q 2011.

And finally in the retail space sector, Colliers said the buoyant tourism market and upbeat consumer confidence kept prime retail rents “healthy” in the second quarter.

Prime retail rents in good quality malls on Orchard Road held steady at the past six quarters’ level of $38.50 per sq ft per month.

Likewise, the average monthly gross rents for similar quality space in the regional centres remained unchanged at the previous quarter’s level of $33.60 per sq ft per month as of 2Q 2011.

Source : Channel NewsAsia – 14 Jul 2011

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