S’pore’s office market rebounds in Q3 as rents increase

Singapore’s office market rebounded in the third quarter as rents increased across all districts.

Global real estate adviser DTZ said prime rents in Raffles Place rose 6.3 per cent on-quarter to S$8.40 per square foot per month.

Average office rental values in other parts of the city centre saw a significant rental growth of 4.2 per cent to 7.3 per cent in the quarter.

This comes after rental values remain unchanged in the second quarter of this year.

With increasing demand, DTZ said office occupancy across Singapore rose further by 1.7 percentage points on-quarter to 94.9 per cent in the last three months.

This is despite the substantial increase in stock of more than 1.1 million square feet from the completion of Tokio Marine Centre and Marina Bay Financial Centre Tower 2 as the latter.

DTZ’s executive director for business space Cheng Siow Ying said: “With rental values on the rebound, larger occupiers are anxious to lock in rents for prime office space.

“This has led to strong pre-commitment rates for uncompleted office buildings like the Ocean Financial Centre”.

DTZ estimates about seven million square feet of office space will be completed between the fourth quarter of this year and 2015.

Head of DTZ South-east Asia Research Chua Chor Hoon said: “The outlook is favourable as office demand is expected to grow with economic expansion.

“However, demand could be dampened if the major economies in Europe and the US turn out to be more sluggish and affect Singapore’s economic growth.

“There is also a substantial amount of new office space (3.03 million sq ft) coming on stream next year which could moderate the rate of rental increase”.

Source : Channel NewsAsia – 23 Sep 2010