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10-01-14, 12:21
http://www.straitstimes.com/archive/wednesday/premium/money/story/office-rents-occupancy-rates-climb-4th-quarter-20140108
Office rents, occupancy rates climb in 4th quarter
Published on Jan 08, 2014
By Cheryl Ong
HIGHER occupancies and rents in the last quarter indicate that the office rental market could be picking up. The uptick was not just in the Central Business District (CBD), which typically has healthy demand, but in the suburban areas as well, industry experts noted.
The average monthly gross rents of Grade A office space in the CBD climbed 2.1 per cent from the third quarter to $9.75 per sq ft (psf) as at end-December, according to consultancy CBRE yesterday. Grade A offices are those in top-quality buildings in Raffles Place, Marina Bay and Marina Centre.
Monthly rents of Grade B offices - older or smaller office blocks - rose 2.1 per cent to $7.25 psf in the same period. The rent rises came on the back of more demand in the fourth quarter. Mr Moray Armstrong, executive director of CBRE's office services, said yesterday: "Most encouraging was the significant uptick in leasing activity in the CBD, with particular focus on the Grade A sector."
Across the island, the rate of office vacancies dipped by 0.74 percentage point to 4.4 per cent in the three months to Dec 31, the lowest since the second quarter of 2008, CBRE added. The Government's push towards decentralisation resulted in a surge in demand for suburban office space in the last quarter.
However, Mr Armstrong expects demand to be concentrated in the CBD as new buildings are constructed - namely the 700,000 sq ft CapitaGreen in Raffles Place and 527,450 sq ft South Beach project in City Hall. Still, the supply of new office space remains limited as CapitaGreen will be the only Grade A building completed by 2016.
"The new CBD office developments are well positioned to capitalise on this re-focus on the CBD," said CBRE.
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Office rents, occupancy rates climb in 4th quarter
Published on Jan 08, 2014
By Cheryl Ong
HIGHER occupancies and rents in the last quarter indicate that the office rental market could be picking up. The uptick was not just in the Central Business District (CBD), which typically has healthy demand, but in the suburban areas as well, industry experts noted.
The average monthly gross rents of Grade A office space in the CBD climbed 2.1 per cent from the third quarter to $9.75 per sq ft (psf) as at end-December, according to consultancy CBRE yesterday. Grade A offices are those in top-quality buildings in Raffles Place, Marina Bay and Marina Centre.
Monthly rents of Grade B offices - older or smaller office blocks - rose 2.1 per cent to $7.25 psf in the same period. The rent rises came on the back of more demand in the fourth quarter. Mr Moray Armstrong, executive director of CBRE's office services, said yesterday: "Most encouraging was the significant uptick in leasing activity in the CBD, with particular focus on the Grade A sector."
Across the island, the rate of office vacancies dipped by 0.74 percentage point to 4.4 per cent in the three months to Dec 31, the lowest since the second quarter of 2008, CBRE added. The Government's push towards decentralisation resulted in a surge in demand for suburban office space in the last quarter.
However, Mr Armstrong expects demand to be concentrated in the CBD as new buildings are constructed - namely the 700,000 sq ft CapitaGreen in Raffles Place and 527,450 sq ft South Beach project in City Hall. Still, the supply of new office space remains limited as CapitaGreen will be the only Grade A building completed by 2016.
"The new CBD office developments are well positioned to capitalise on this re-focus on the CBD," said CBRE.
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