Office rental market dropped in almost all areas

Poor lessor: It's now even possible to rent a 10K sq ft of space free for upto 5 months.

Here's from Knight Frank:

Overall in the Central region, office rents decreased slightly. The URA Rental index reflected 171 in 2Q 2012, which was a marginal drop of 0.5 per cent from 1Q 2012. 

Despite having a substantial amount of pre-committed space with the completion of MBFC Tower 3, the release of 2.46 mil sq ft of office GFA in the Marina Bay precinct last quarter had resulted in a 12.6 per cent quarter on quarter downward correction for Grade A+ spaces in 1Q 2012. In 2Q 2012, Grade A+ office rents stayed flat averaging
at $11.30 per sq ft, as the market continues to absorb space from MBFC Tower 3.

Unlike 2007 and 2008 where office rents in the CBD were fast rising and demand far exceeding supply, 2012 sees the market shifting in favour of tenants. Office rents in Raffles Place in 2Q 2012 have remainedflat at an average of $8.70 per sq ft. Large space tenants such as Standard Chartered Bank that shifted from the Raffles Place area to the Marina Bay precinct has left Raffles Place with a substantial amount of available office space.

While most landlords are not reducing their rental expectations, they are open to offering tenants concessions such as increased rent free periods. Typically, rent free periods are around one to two months for 100 sq ft to 2,000 sq ft of office space. Depending on the amount of space leased, this can increase further. In the current market, it is possible for a 10,000 sq ft of space to fetch 5 months of rent free period. With such perks in store, tenants have the option of renewing their leases in existing buildings, taking up a new lease at relatively better locations, or in a
newer building at almost the same rental rate but with additional concessions. Any significant cost savings after accounting for the cost of relocation will tilt favourably into a physical shift.

Since the relaxation of regulations for legal practice by the government, more specialised foreign law firms have entered into Singapore. Serviced offices benefit from this as new-to-Singapore firms take up single year leases in fully fitted office spaces while they test out and establish their business in the local market.

Outside of Raffles Place, office rents have remained stable. The Suntec/City Hall area saw rents averaging at $9.50 per sq ft and $7.20 per sq ft for Tanjong Pagar. In the suburban market, average monthly gross office rents remained relatively firm at $6.20 per sq ft over the past quarter. IT firms have been seen shifting out of CBD to such
suburban locations where they enjoy rental savings.