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Office market here is still active

Posted on 24 Sep 2009 | Comments Off

The vacancy rate in prime Grade A buildings rose from 1.8% in Q3 2008 to 6.1% in Q2 this year

THE office market here, like many around the world, has seen a fundamental shift in dynamics over the last nine months, with a marked drop in demand since the collapse of Lehman Brothers a year ago leading to a drop in rents. While all markets are cyclical, Singapore’s commercial property market has seen rental fluctuations that are typical of a more volatile market such as Hong Kong.

The reason for this is that many new developments were cancelled or delayed during the Asian financial crisis/Sars period in 2002-2004. The typical four-year construction period for a Grade A office building means that there is a lag in the supply pipeline, which was adversely affected from 2006-2008.

These were the years which saw a substantial increase in demand for office space. Much of it came from the financial services sector, partly as a result of the global growth of this sector and partly as a result of Singapore’s successful repositioning as a global financial services centre.

Jones Lang LaSalle’s research shows that from the bottoming out of the market in 2004 to the peak in Q3 2008, Grade A core CBD vacancy shrank from 11.6 per cent to 1.8 per cent and rents surged by 303 per cent. Post credit crisis, the negative take-up and concerns of over-supply have led to rents dropping by 48 per cent between Q3 2008 and Q2 2009. Continue reading →

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Posted in Office / Retail / Industrial, Property Market / Real Estate

Tagged Market Report, Office Rental, Office Space, Singapore Office, Singapore Office Market, Singapore Office Rental, Singapore Property Market

Mapletree in talks to lease more space

Posted on 24 Sep 2009 | Comments Off

Business park has leased 40% of space to major firms

MAPLETREE Investments Pte Ltd said yesterday that it is in advanced negotiations to pre-lease another 15 per cent of space at its Mapletree Business City.

Mapletree Business City: The park will have environmentally friendly features like full, double-glazed curtain walls for all its buildings to reduce the heat load

This follows the 40 per cent of its space that has already been pre-leased to tenants such as HSBC, Amex, Unilever and German software major SAP ahead of the business park’s expected completion next year

At the topping-out ceremony of the business city yesterday, the fully-owned unit of Temasek Holdings said that it expects to close the deals to pre-lease the 15 per cent of space soon. It declined to provide additional details on the negotiations.

Mapletree Investment’s chairman Edmund Chen said that the company’s ability to secure pre-leasing with major tenants such as HSBC is due in part to approaches such as the signing of longer leases of six to 10 years.

This ‘gives our tenants a reasonable time frame to amortise their set-up or relocation costs, while providing rental certainty against the vagaries of the market’, said Mr Chen.

‘We also allow our tenants the flexibility of scaling up their space requirements by taking up additional space within the same stack of space in the buildings.’

When completed in 2010, the park – which will have a total lettable area of 1.73 million sq ft – will be linked to the company’s two other properties, The Comtech and PSA Building. It will also boast facilities such as a gym, a Wi-Fi enabled alfresco dining area and a heated lap pool.

The business park will also have environmentally friendly features like full, double-glazed curtain walls for all its buildings to reduce the heat load.

Source : Business Times – 24 Sep 2009