2 themes which largely affected the luxury prime market in 3Q

Average luxury prime rent down 0.2% q-o-q to SGD 524 per sqm.

Jones Lang LaSalle notes that rents declined as tenants relocated to cheaper Typical Prime properties.

Two themes that impacted rents this quarter were an increase in the number of lease terminations by companies (usually on a 2+1 year package) as they sped up their outsourcing plans to developing Asian countries and an increase in leasing activity for expatriates getting housing allowances between SGD 8–12,000 per month.

Here's more from JLL:

As bargain hunters made more purchases in the Luxury Prime market to capitalise on the closing price gap between Mass market and Prime market properties, the declining capital values in the segment were halted.

Therefore, resale capital values for the segment stayed stable at SGD 25,618 per sqm, while capital values in the Typical Prime segment rose 0.4% to SGD 14,585 per sqm.

12-Month Outlook
The expectations and subsequent announcement of QE3 by the Federal Reserve have made it more likely that there could be more market liquidity and a prolonged period of low interest rates. These factors could contribute to an upward bias towards capital values in the foreseeable future.