Marina Bay, Raffles Place office rents hit three-year high in Q4

Rents jumped to $12.1 per square feet last quarter.

Office landlords ended 2014 on a positive note, after Grade A office rents in the core Central Business District climbed to their highest average rental level since the fourth quarter of 2011.

According to Knight Frank, Grade A+ office buildings in Raffles Place and Marina Bay continued to lead rental growth with their monthly gross rents having increased by 1.7 per cent q-o-q to touch $12.10 per sq ft in 4Q 2014, representing their highest average rental level in three years.

“This increment was attributed to landlords increasing their rents for new leases and renewals, as well as the inclusion of prime office space in CapitaGreen. Grade A office buildings in the same area saw a slower rental growth of 0.3 per cent q-o-q to reach an average of $10.50 per sq ft in the same quarter. Prime Grade A+ and Grade A office spaces saw 6.1 per cent year-on-year growth in gross monthly rents in 4Q 2014,” stated Louise Toovey, Director of Office at Knight Frank Singapore.

Here’s more from the report:

Overall office rents in Raffles Place and Marina Bay climbed by 0.5 per cent quarter-on-quarter (q-o-q) in 4Q 2014, albeit at a marginally slower pace compared to the previous quarter of 0.6 per cent q-o-q.

Despite the stellar performance with rental growth over six consecutive quarters, the quarterly increase in Raffles Place and Marina Bay average rents has been slowing for the last three quarters, as tenants are more cautious in signing higher rents for spaces in the core CBD and are looking for alternative locations that similarly suit their needs.