Grade A office rentals predicted to edge up 8% in 2014

Demand is also expected to rebound.

According to UOB Kayhian, Office rental market most favourable with Grade-A office rentals anticipated to rise 8% in 2014 after bottoming in 2013 and comes after Demolitions could remove over 60% of upcoming supply over the next two years, with over 2.4m sf of office space slated for redevelopment.

They forecast demand to rebound to about 2.1m sf p.a. in 2013-17, compared with 1.2m sf p.a. historically driven by new sources of demand.

Here's more from UOB Kayhian:

Over 50%, or 1.3msf, of office space that will be completed in 2013 has been pre-committed, supported by strong leasing interest at Ho Bee’s Metropolis project, with total leasing demand anticipated to reach 1.6m sf this year.

We expect island-wide occupancy level to increase from 90% in 2012 to 94% in 2017 as the average annual supply of 1.7m sf p.a. falls short of demand. Office occupancy costs in Singapore remain competitive, as rental differentials between Hong Kong and Singapore offices have reached a record 105%.