Rents for premium grade office in Singapore up 2%

First increase in seven quarters.

According to a release, Colliers International’s latest quarterly research report on the office property sector revealed that rents of Premium Grade office space increased for the first time in seven quarters, while office rents in other micro-markets stabilised in 2Q 2013. 

Colliers noted that the average monthly gross rents of Premium Grade office space in the Raffles Place/New Downtown micro-market rebounded 2 per cent on a quarter-on-quarter (QoQ) basis in 2Q 2013 to reach S$9.60 per sq ft. This is the first time office rents in this micro-market have risen since the market downturn in 4Q 2011. 

As of June 2013, the average monthly gross rents of both Premium Grade and Grade A office space in the CBD stood at S$8.42 per sq ft, which is relatively unchanged from the S$8.41 per sq ft recorded for the preceding quarter.

Mr Marcus Loo, Executive Director of Office Services at Colliers International, says, “Office buildings located in the New Downtown area has continued to draw interest from tenants – as the locality progressively develops to become the new financial centre of Singapore, with both the road and public transport infrastructure taking shape.

Additionally, we continued to witness flight to quality during the quarter, as tenants took the opportunity to take up better quality office space.

This demand has, therefore, lent support to landlords who were then able to either maintain or increase their asking rents – resulting in the stabilisation of rental levels islandwide, with recovery being more encouraging in Premium Grade developments.”