Office Rental | Lush Dream Home

Tag Archives: Office Rental

S’pore offices 3rd most expensive in Asia

Posted on 18 Nov 2009 | Comments Off

Slowdown in fall in rents in Q3 attributed to confidence in economic recovery

OFFICE space in Singapore was the third most expensive in the region in the third quarter, as the fall in rents slowed significantly, a Colliers International survey has found.

‘Among all Asia-Pacific cities, Singapore registered the most distinct deceleration in office rental declines,’ said the firm’s director of research and advisory, Tay Huey Ying.

She attributed this to growing confidence in economic recovery, which ‘lifted the gloom that had been pervading the office property market since Q4 2008′.

The Colliers survey, which covers 25 Asia-Pacific cities quarterly, found Singapore’s office rents to be the region’s third most expensive in Q3, after Tokyo and Hong Kong.

The average monthly Grade A rent in the Central Business District (CBD) dipped 6.4 per cent quarter-on-quarter in Q3, after a steep 26.1 per cent slide in Q2. The average gross office rental in the CBD in Q3 was $6.31 per square foot.

Enquiries about new space rose in Q3 as some occupiers began searching for larger and better premises.

One of those that has already upgraded is insurer AIG, which relocated from the CBD fringe to 78 Shenton South Tower. And at Mapletree Anson, more than 100,000 sq ft of space has been leased to companies such as AON, QBE and Sumitomo Corporation, which are relocating from Singapore Land Tower, OCBC Centre and Equity Plaza respectively. Elsewhere, Servcorp has committed to one floor at Marina Bay Financial Centre in the CBD for seven years.

The average occupancy rate of prime office space in the CBD fell 2.1 percentage points from a quarter ago to 92.2 per cent in Q3 as several new buildings, including Mapletree Anson and 71 Robinson, were completed.

But there could be further downward pressure on rents as demand for Grade A office space here is unlikely to grow in the short term, while supply is set to rise with the completion of major projects such as Twenty Anson and the Straits Trading Building.

Ms Tay said that she expects office rents to fall as much as 5 per cent in Q4, taking the full-year contraction to 48 per cent.

Source : Business Times – 18 Nov 2009

Comments Off on S’pore offices 3rd most expensive in Asia

Posted in Office / Retail / Industrial

Tagged Office Rental, Office Space, Singapore Office

High-spec space losing favour due to low office rents

Posted on 14 Nov 2009 | Comments Off

HIGH-spec industrial space has lost favour with tenants in the past few months. As office rents plunged, some companies have gone back to leasing commercial space, says Colliers International.

The move has, in turn, driven down rents for high-spec space. According to the property consultancy, the average monthly gross rent of high-spec space fell 14.1 per cent to $2.93 per square foot at end-September from $3.41 psf at end-March.

The lower rents reflect stiff competition for tenants, Colliers said, adding that some companies had taken advantage of the sharp drop in office rents to relocate to office premises.

This marks a reversal of the trend that started in 2007. As office rents soared on the back of a booming economy, more firms moved away from the central business district to cheaper high-spec industrial space.

But office rents have plummeted amid the economic slowdown. CB Richard Ellis said in September that monthly prime office rents averaged $7.50 psf in the third quarter, dropping 12.8 per cent from the previous quarter. They have fallen 53.4 per cent from their peak in Q3 last year.

Colliers said that on top of shrinking demand, a large supply of high-spec space is expected to appear next year, which has also contributed to falling rents.

In contrast, rents for some factories and warehouses have been relatively stable. Colliers said that from end-March to end-September, the average monthly gross rent of single-user factories in central Singapore stayed firm at $1.30 psf, while that of warehouses in eastern Singapore held up at $1.20 psf.

And on a positive note, Colliers said that there has been a noticeable pick-up in sales of industrial space. These involved mainly private investors, owner-occupiers and domestic companies.

While industrial space markets across the Asia-Pacific appear to be bottoming out, Colliers remains cautious in its outlook. It believes that these markets could stay subdued in the next 12 months, given that the global economy is still recovering and excess manufacturing capacity still exists.

Colliers research and advisory director Tay Huey Ying expects rents and capital values of factories and warehouses in Singapore to rise by up to 5 per cent in the next 12 months ‘on the back of the expected improvement in the economy and the manufacturing sector, as well as more optimistic business sentiment’.

Source : Business Times – 12 Nov 2009