Tag Archives: Office

More office space for lease this year

Posted on 3 May 2012 | Comments Off on More office space for lease this year

DTZ Research said it expects more office space to be returned to the market for lease for the rest of 2012.

In a report, DTZ said about 215,000 square feet of shadow space was made available in the first quarter of the year, up 15 per cent on-quarter.

Shadow space refers to the excess space that companies have leased but are looking to sublet.

DTZ said another 700,000 sq ft could be returned to the market in the coming quarters, either as shadow space or following lease expiry as companies relocate to newer office buildings.

Despite the limited supply of new office space this year, DTZ said there would be some downward pressure on rents as companies remain cautious, avoiding pre-committing to additional space.

DTZ added that landlords of buildings with high occupancy are still keeping gross face rents unchanged.

It said the average gross face rent for prime office space, which does not take into account rent holiday, stood at S$12.00 per sq ft per month in Marina Bay and S$9.80 in Raffles Place in Q1 2012.

But DTZ noted that landlords are more keen to offer leasing incentives such as longer rent holiday ranging between two and six months to fill up the premises.

A two-month rent holiday could translate into savings of 5.6 per cent on effective rent according to DTZ.

The findings also showed that more financial and insurance companies are moving in to Marina Bay.

DTZ said as of Q1 2012, three-quarters of occupied office space in Marina Bay was taken up by companies in the FI sector, compared to 55 per cent in Raffles Place.

The amount of space occupied by FI companies in Marina Bay is expected to grow as occupiers move in to newly completed buildings such as Asia Square Tower 1 and Marina Bay Financial Centre Tower 3.

DTZ head of Asia Pacific Research Chua Chor Hoon said: “The desire by FI companies to be in prestigious locations and in newer buildings designed to suit their needs has led to their gravitation to Marina Bay.

“As more buildings are completed in Marina Bay, the space occupied by FI companies there could soon close in on that in Raffles Place in the next five years.”

Despite the relocation of FI companies to Marina Bay, DTZ said the occupancy rate in Raffles Place has held up better in Q1 2012 because of its bigger base of tenants.

The study covers buildings with more than 100,000 sq ft of net lettable area.

Source: – CNA 3 May 2012

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Property investment in Asia grows in Q3

Posted on 5 Nov 2009 | Comments Off on Property investment in Asia grows in Q3

Office market’s fall stabilises due to improvement in employment

The Asian real estate investment market continued to gain momentum in the recent third quarter, as capital values generally stabilised and sentiment improved.

Direct real estate investment in Asia jumped 25 per cent quarter-on-quarter to an estimated US$9.1 billion, according to a report by CB Richard Ellis (CBRE).

The property firm also said in a separate note that the Asian office market down-cycle stabilised in Q3 as a general improvement in the region’s employment markets provided clear indication that the office market was close to bottom.

‘Investors in Asia have become more optimistic over the past few months,’ said Andrew Ness, executive director of CBRE Research for Asia. ‘Cash-rich domestic buyers continue to underpin investment activity, while foreign investors are slowly emerging from a quiet first half-year to look for medium to long-term investments.’

However, several Asian governments – including those in Hong Kong, Singapore, China and South Korea – have voiced concern that real estate is rebounding too strongly and have taken steps to limit risks associated with potential over-investment, Mr Ness said.

‘The measures are likely to cool down the market but are expected to have only a limited effect on pricing,’ he said.

In Q3, Hong Kong accounted for 36 per cent of total investment sales, followed by China, Korea and Taiwan. In Singapore, the number of transactions above $15 million continued to edge up quarter-on-quarter, with volume exceeding US$900 million, or 10 per cent of the total volume in Asia.

However, overall transaction volume remained low in the first nine months of this year, falling 49 per cent year-on-year.

By sub-sectors, the Asian office market attracted US$4.7 billion of investment in Q3, or 52 per cent of the total flow of capital. Residential properties accounted for 16 per cent and the retail sector 13 per cent.

In a separate report, CBRE said that Asian office markets continued to improve in Q3 as rental falls slowed further.

The overall vacancy for Asian cities remained at 12.5 per cent – unchanged from the previous quarter. But Tokyo, Hong Kong, Beijing, Seoul and several South-east Asian cities all recorded a minor decline in the amount of space vacancy.

‘Corporations outside of the export trade sector commenced expanding headcount and financial institutions began hiring staff to pursue high-margin businesses as economic conditions improved,’ said CBRE. ‘Historically, office vacancy has trailed closely behind the unemployment rate.’

On the back of this, the CBRE Asia Office Rental Index shows office rents in Asia fell 3.1 per cent in Q3, decelerating from a 6.7 per cent decline in Q2. CBRE expects the rate of decline to ease further or bottom out in the coming months.

In Singapore, office rents fell for a fourth consecutive quarter in Q3 but the pace of decline eased. Continue reading →

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