CBD Grade A rents up 4.7% in Q1

Capital value and rates also remained unchanged in Q1 2020.

CBD grade A office rents rose 4.7% YoY to $10.09 per sqft per month (psf pm) in Q1 as the negative impact of the COVID-19 pandemic will continue in Q2, according to a Colliers report. On a QoQ basis, grade A office rents remained unchanged.

Likewise, CBD Grade B office rents also inched up 4.8% YoY or 0.3% QoQ to $8.44 psf pm.

Average imputed capital value of CBD Grade A office properties stayed flat QoQ at $2,518 psf. Cap rates also remained unchanged at a range of 3.15% and 3.50% in Q1 2020, as rents and capital values remained flat.

Meanwhile, total office or mixed office developments investment volumes fell 32% QoQ to $746m in Q1 2020, bringing the rolling 12-month volumes down 2.6% QoQ to $7.4b.

Colliers believes capital markets may stay subdued in H1 2020 as concerns about the economic fallout from the outbreak could cloud market sentiment, noting that the negative impact of the pandemic was not apparent in Q1 2020.

However, real estate investment sales prospects remain optimistic on a favourable interest rate outlook and capital allocation to Asia over the next few years.