Premium grade office rents surge 6.1% in Q3: Colliers
The quarter-on-quarter increase was the highest in three years, and comes amid a continued shortage of office space in the central business district, the real estate services firm says.
SINGAPORE: Premium grade office rents in the Raffles Place/New Downtown area surged 6.1 per cent in the third quarter to S$11.67 psf per month amid a continued shortage of office space in the central business district, real estate services firm Colliers International said on Monday (Oct 13).
The 6.1 per cent quarter-on-quarter increase was the highest in three years, and was nearly double the 3.1 percent pace recorded in the second quarter.
Grade A office space in the Raffles Place/New Downtown area rose 2.9 per cent quarter on quarter to S$10.25 psf in July-September, while Grade A rents in the Shenton Way and Tanjong Pagar area gained 2.9 per cent to S$8.83 psf.
Colliers defines premium-grade offices as those found in relatively new buildings with large floor plates of more than 20,000sqft as well as intelligent features. Examples of such buildings include Marina Bay Financial Centre and Asia Square.
Grade A offices, on the other hand, refer to those in good quality buildings in strategic locations that are well served by amenities and transport nodes, for example 6 Battery Road and Republic Plaza Tower 1.
Colliers said the rise in office rents comes amid a supply squeeze, with the average occupancy rates of most micro-markets having breached the technical full occupancy rate of 95 per cent.
For instance, as of September 2014, the average occupancy rate for Grade A space in Raffles Place/New Downtown and Shenton Way/Tanjong Pagar stood at 97.2 per cent and 99.4 per cent, respectively.
- CNA/cy
- wong chee tat :)
Showing posts with label Shenton Way. Show all posts
Showing posts with label Shenton Way. Show all posts
Wednesday, October 15, 2014
Thursday, June 27, 2013
Singapore's office rental market expected to go up
Singapore's office rental market expected to go up
By Toni Waterman
POSTED: 26 Jun 2013 11:24 PM
Singapore's office rental market is on the rebound after bottoming out in the last quarter of 2012, according to Cushman & Wakefield.
SINGAPORE: Singapore's office rental market is on the rebound after bottoming out in the last quarter of 2012, according to Cushman & Wakefield.
In its quarterly office market report, the real estate firm said rents are on the rise and vacancies are drying up, though not all office buildings are sharing the comeback.
Cushman & Wakefield's latest office market report showed that the average rent in prime Grade A locations was up 4.2 per cent in the second quarter, from a quarter earlier, hitting S$9.03 a square foot per month.
That was up from S$8.99 per square foot per month in the first quarter of this year.
Sigrid Zialcita, managing director of research for the Asia Pacific at Cushman & Wakefield, said: "We are expecting rents to go up across the board on the back of very solid demand.
"We're not going to see the spikes we've seen in the 2007-2008 time frame, where rents went as high as S$18-S$19 a foot."
The report showed that all the CBD submarkets saw average rents appreciate, with Marina Bay and Shenton Way seeing a 9 per cent rise in rents. In the fringe area, Orchard Road's average rents moved up by around 4.6 per cent quarter-on-quarter.
The average rent in the suburban submarket rose slightly -- by 1.3 per cent quarter-on-quarter -- to S$5.64 psf per month.
Vacancy rates for Grade A office space is also improving -- dropping to 3.7 per cent in the second quarter from 5.0 per cent in the first quarter.
Vacancies at Marina Bay shrank to 3.6 per cent in Q2, from 5.6 per cent a quarter ago and 12.1 per cent a year ago. Raffles Place had an overall vacancy rate of 5.5 per cent, while Shenton Way's vacancy rate stood at 4.9 per cent.
Experts said diversity in the tenant pool has helped fill the office space.
"Long gone are purely financial institutions," said Desmond Sim, associate director of CBRE Research. "You have complimentary services like insurance, you've got legal all coming in to take up Grade A stock within Marina Bay and Raffles Place."
Also helping the office rental market is the limited new supply coming to the market.
Mr Sim said: "This year, we have the Asia Square Tower II coming on stream. Next year, we have CapitaGreen that will come on stream. Then we actually have a break of no Grade A product coming in 2015.
"So if someone is trying to take advantage of the current low Grade A rents, they might realize the Grade A stock coming online is quite limited."
One place where vacancies are not falling is in the suburbs, where vacancies are expected to rise to over 8 per cent through 2014.
The suburban vacancy rate was 2.7 per cent in 2012, and is expected to rise to 6.0 per cent this year and hit 8.2 per cent in 2014.
Sigrid Zialcita said: "In the suburbs, we're going to see some massive projects delivered and add space, but again we don't think it's a huge concern for the market because the take up we've seen has been brisk, and going forward we see very healthy leasing occurring in this properties."
There will be more options, but not necessarily better prices, as experts said despite rising vacancies, rental rates in the suburbs will remain stable at around S$5.50 per square foot this year to 2014.
- CNA/al
- wong chee tat :)
By Toni Waterman
POSTED: 26 Jun 2013 11:24 PM
Singapore's office rental market is on the rebound after bottoming out in the last quarter of 2012, according to Cushman & Wakefield.
SINGAPORE: Singapore's office rental market is on the rebound after bottoming out in the last quarter of 2012, according to Cushman & Wakefield.
In its quarterly office market report, the real estate firm said rents are on the rise and vacancies are drying up, though not all office buildings are sharing the comeback.
Cushman & Wakefield's latest office market report showed that the average rent in prime Grade A locations was up 4.2 per cent in the second quarter, from a quarter earlier, hitting S$9.03 a square foot per month.
That was up from S$8.99 per square foot per month in the first quarter of this year.
Sigrid Zialcita, managing director of research for the Asia Pacific at Cushman & Wakefield, said: "We are expecting rents to go up across the board on the back of very solid demand.
"We're not going to see the spikes we've seen in the 2007-2008 time frame, where rents went as high as S$18-S$19 a foot."
The report showed that all the CBD submarkets saw average rents appreciate, with Marina Bay and Shenton Way seeing a 9 per cent rise in rents. In the fringe area, Orchard Road's average rents moved up by around 4.6 per cent quarter-on-quarter.
The average rent in the suburban submarket rose slightly -- by 1.3 per cent quarter-on-quarter -- to S$5.64 psf per month.
Vacancy rates for Grade A office space is also improving -- dropping to 3.7 per cent in the second quarter from 5.0 per cent in the first quarter.
Vacancies at Marina Bay shrank to 3.6 per cent in Q2, from 5.6 per cent a quarter ago and 12.1 per cent a year ago. Raffles Place had an overall vacancy rate of 5.5 per cent, while Shenton Way's vacancy rate stood at 4.9 per cent.
Experts said diversity in the tenant pool has helped fill the office space.
"Long gone are purely financial institutions," said Desmond Sim, associate director of CBRE Research. "You have complimentary services like insurance, you've got legal all coming in to take up Grade A stock within Marina Bay and Raffles Place."
Also helping the office rental market is the limited new supply coming to the market.
Mr Sim said: "This year, we have the Asia Square Tower II coming on stream. Next year, we have CapitaGreen that will come on stream. Then we actually have a break of no Grade A product coming in 2015.
"So if someone is trying to take advantage of the current low Grade A rents, they might realize the Grade A stock coming online is quite limited."
One place where vacancies are not falling is in the suburbs, where vacancies are expected to rise to over 8 per cent through 2014.
The suburban vacancy rate was 2.7 per cent in 2012, and is expected to rise to 6.0 per cent this year and hit 8.2 per cent in 2014.
Sigrid Zialcita said: "In the suburbs, we're going to see some massive projects delivered and add space, but again we don't think it's a huge concern for the market because the take up we've seen has been brisk, and going forward we see very healthy leasing occurring in this properties."
There will be more options, but not necessarily better prices, as experts said despite rising vacancies, rental rates in the suburbs will remain stable at around S$5.50 per square foot this year to 2014.
- CNA/al
- wong chee tat :)
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