Chart of the Day: Office rents dip by 1.6% in 4Q2011

The average monthly gross rents for CBD Grade A office space fell to SGD8.93psf, the first time since the market bottomed in 4Q2009.

According to Colliers International, the dip in rents was in tandem with the fall in occupancy rate from previous quarter’s 92.6% to 91.6% in 4Q 2011, due largely to the new completion of some 250,000 sq ft of space in the New Downtown micro-market.

However, the increase in office stock was not met with corresponding new occupier demand as many firms turned cautious towards expansion, said Colliers.

Despite a gloomier outlook, Colliers believes that Singapore’s strong economic fundamentals could help the country and the office market ride through the current uncertainties.

“Hence, though Singapore’s office rents will likely soften from current levels, the magnitude of decline is expected to be more tamed as compared to the previous crisis. Office rents are forecast to decline by around 10-15% in 2012 as against a 20-50% correction seen in the first year of the global financial crisis-led decline in 2009,” Colliers said in a report.