mr funny
23-12-10, 15:53
http://www.businesstimes.com.sg/sub/suite/story/0,4574,418808,00.html?
Published December 23, 2010
Office, industrial rents sustain uptrend for Q4
Demand should stay if economic recovery continues, says JLL
By EMILYN YAP
LANDLORDS of offices and conventional industrial space enjoyed a good fourth quarter as rents continued to climb.
According to Jones Lang LaSalle (JLL), the average CBD prime Grade A gross effective rent rose 7.5 per cent from the previous quarter to $9.35 per sq ft per month in Q4. Year on year, the increase is 19.9 per cent.
The vacancy rate in the CBD core area in Q4 was 5.4 per cent, slightly higher than the 5.3 per cent in Q3, as a result of major tenant relocations.
JLL's head of markets Chris Archibold believes that demand for office space should be steady if economic recovery remains on track.
'Although there is some supply pressure expected in 2011 with the likes of OUE Bayfront, Ocean Financial Centre, Asia Square Tower 1 and One Raffles Place Tower 2 completing, the reality is that much of this space has already been let. The market will also see numerous older office buildings being taken out for redevelopment,' he said.
The consultancy found that the overall commitment for supply coming up in 2011 has increased to around 50 per cent.
JLL's research head for Singapore and South-east Asia Chua Yang Liang added that the return of 'growth sectors' such as legal arbitration and personal wealth management is likely to support demand for office space further.
The picture was also rosy in the conventional industrial space sector. According to DTZ, the average monthly gross rent for ground-floor space grew 2.5 per cent from the previous quarter and 5.1 per cent from the previous year to $2.05 psf in Q4.
For upper storey space, the average monthly gross rent rose 3.1 per cent quarter on quarter and 6.5 per cent year on year to $1.65 psf.
'There is strong demand from end-users for standalone factories and SMEs for multi-user factory space,' said DTZ executive director for occupational and development markets Angela Tan.
'As the industrial market generally moves in tandem with the economy and the office market, industrial rents are expected to continue to rise next year but at a more moderate pace.'
Apart from rents, capital values of industrial properties also increased in Q4. The average capital value for first-storey industrial space grew 2.3 per cent from a quarter ago to $525 psf, while that for upper-storey space rose 4.2 per cent to $370 psf.
Measures to curb speculation in the residential property market, and the smaller sums required to purchase industrial properties, have led more investors into the industrial market, said South-east Asia research head Chua Chor Hoon.
In the high-tech industrial space sector, the average monthly rent in Q4 was $3.20 psf, up 1.6 per cent from the last quarter.
The faster pace at which average office rents are rising have caused the rental gap between decentralised offices and hi-tech industrial space to widen, DTZ said.
Nevertheless, the rental difference is still far smaller than that seen in 2008.
Published December 23, 2010
Office, industrial rents sustain uptrend for Q4
Demand should stay if economic recovery continues, says JLL
By EMILYN YAP
LANDLORDS of offices and conventional industrial space enjoyed a good fourth quarter as rents continued to climb.
According to Jones Lang LaSalle (JLL), the average CBD prime Grade A gross effective rent rose 7.5 per cent from the previous quarter to $9.35 per sq ft per month in Q4. Year on year, the increase is 19.9 per cent.
The vacancy rate in the CBD core area in Q4 was 5.4 per cent, slightly higher than the 5.3 per cent in Q3, as a result of major tenant relocations.
JLL's head of markets Chris Archibold believes that demand for office space should be steady if economic recovery remains on track.
'Although there is some supply pressure expected in 2011 with the likes of OUE Bayfront, Ocean Financial Centre, Asia Square Tower 1 and One Raffles Place Tower 2 completing, the reality is that much of this space has already been let. The market will also see numerous older office buildings being taken out for redevelopment,' he said.
The consultancy found that the overall commitment for supply coming up in 2011 has increased to around 50 per cent.
JLL's research head for Singapore and South-east Asia Chua Yang Liang added that the return of 'growth sectors' such as legal arbitration and personal wealth management is likely to support demand for office space further.
The picture was also rosy in the conventional industrial space sector. According to DTZ, the average monthly gross rent for ground-floor space grew 2.5 per cent from the previous quarter and 5.1 per cent from the previous year to $2.05 psf in Q4.
For upper storey space, the average monthly gross rent rose 3.1 per cent quarter on quarter and 6.5 per cent year on year to $1.65 psf.
'There is strong demand from end-users for standalone factories and SMEs for multi-user factory space,' said DTZ executive director for occupational and development markets Angela Tan.
'As the industrial market generally moves in tandem with the economy and the office market, industrial rents are expected to continue to rise next year but at a more moderate pace.'
Apart from rents, capital values of industrial properties also increased in Q4. The average capital value for first-storey industrial space grew 2.3 per cent from a quarter ago to $525 psf, while that for upper-storey space rose 4.2 per cent to $370 psf.
Measures to curb speculation in the residential property market, and the smaller sums required to purchase industrial properties, have led more investors into the industrial market, said South-east Asia research head Chua Chor Hoon.
In the high-tech industrial space sector, the average monthly rent in Q4 was $3.20 psf, up 1.6 per cent from the last quarter.
The faster pace at which average office rents are rising have caused the rental gap between decentralised offices and hi-tech industrial space to widen, DTZ said.
Nevertheless, the rental difference is still far smaller than that seen in 2008.