The average gross face rents for prime office space in Singapore declined in the second quarter as global economic uncertainties continued to plague occupier sentiment, according to DTZ.
Those in the Raffles Place area declined by 3.1 per cent quarter-on-quarter to S$9.50 (US$7.43) per sq ft per month while rents in the Shenton Way/Robinson Road/Cecil Street areas declined by 2.6 per cent to S$7.55 (US$6) per sq ft per month.
DTZ said rents in the CBD were falling “despite pockets of demand from occupiers who saw the current climate as an opportunity to upgrade to better-quality space.”
“Although occupancy rates in the CBD remain healthy at levels above 90 per cent, most landlords are still prepared to offer competitive terms though they are not rushing to lower their rents significantly. Some landlords are however offering more incentives such as longer rent holidays in anticipation of slowing demand and rising vacancies,” said Cheng Siow Ying, DTZ’s executive director for Business Space.
Meanwhile, the average occupancy rate for office space at Raffles Place fell 0.7 percentage-points in the second quarter to about 92 per cent.
DTZ said, the removal of Chow House from the stock in the Shenton Way/Robinson Road/Cecil Street precincts in the quarter saw occupancy rate rising 1.3 percentage-points to about 95 percent.
Meanwhile, those in the Marina Bay increased the most by 4.5 percentage-points to about 72 per cent as occupiers started to move into Marina Bay Financial Tower 3 which was completed at the end of the previous quarter.
DTZ expects CBD rents to continue facing downward pressure as occupiers brace themselves for the global economic slowdown.
In addition, it warns of the “lower-than-average net increase in supply of 1.1 million sq ft of office space in 2012”.
Source: PropertyReport – 2012 Jun 27
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