Suburban rents to inch up 3% in 2013

Occupancy will still stay above 95%.

According to DBS, evidently, pre-commitment for new suburban malls being completed in the next 12 months appears to be on track as landlords of mega shopping malls tend to commence marketing well ahead of the completion of their developments.

Here's more from DBS:

Those that have been completed recently including JCube and Changi City Point, have achieved close to 100% occupancy. Meanwhile, the two large suburban malls - Westgate and Jem that are expected to open by end of 2013, have achieved 50% and >90% pre-commitment respectively.

We believe this a good indication of strong leasing demand in the suburban area as Jurong Gateway has the highest concentration of new malls. This should do well to allay any supply overhang concerns.

As such, occupancy should continue to stay above 95% next year and rent should grow by 2-3%, tracking the long-term inflation rate.