MODEST INCREASE IN OFFICE RENTS

From this quarter onwards, statistics on retail space will be released instead of shop space. Businesses, investors and members of the public can tap on the information to make more informed decisions on their purchase and rental of commercial properties.

More detailed and comprehensive information on commercial properties are now available for free on the URA website

From this quarter onwards, statistics on retail space will be released instead of shop space. Businesses, investors and members of the public can tap on the information to make more informed decisions on their purchase and rental of commercial properties. 

Meanwhile, prices of retail space remained unchanged in Q1 2014, following a 0.3 percent increase in the preceding quarter. Rentals for retail space declined by 0.3 percent in Q1 2014, following the increase of 0.2 percent in Q4 2013.  

The islandwide vacancy rate of retail space rose from 4.5 percent in Q4 2013 to 5.8 percent in Q1 2014. Desmond Sim, Head, CBRE Research, Singapore said, "This could likely be partially attributed to the fact that some projects were awarded TOP in the later end of this quarter and may be deemed physically unoccupied."

At the end of Q1 2014, total supply of retail space from projects in the pipeline stood at 928,000 sqm 
of gross floor area (GFA). 

Prices of office space, on the other hand, rose 0.5 percent, which is the same increase in the previous quarter. Rentals of office space climbed 2.4 percent, following the 0.5 percent increase in Q4 2013.

The islandwide vacancy rate of office space at the end of Q1 2014 increased from 9.9 percent in the last quarter to 10 percent. 

This shows that rents have risen moderately even though take-up has been slow. In a statement JLL noted, "In the absence of larger leasing deals, most of the deals involve smaller spaces which would have resulted in higher rental rates. The asking rents for better quality office buildings have also risen as their vacancy rates are generally lower and this would have also contributed to rising rents."

There has also been a surge in supply of office space in the Outside Central Region (OCR) as observed by Knight Frank. Alice Tan, Head of Research at Knight Frank Singapore said, "In 1Q 2014, the bulk of new office supply stemmed from the OCR with an additional 280,000 sq ft of office space due to the completion of the Jem office tower." This marks the highest quarterly new supply since Q2 2000.

Chia Siew Chuin, Director of Research & Advisory at Colliers International, added that its research showed that buying momentum in the sales market is mixed, as the average capital value of Premium Grade office space in the Raffles Place and New Downtown micro-market remained unchanged at $2,667 psf in Q1 2014, while Grade A office space inched up 0.2 percent quarter-on-quarter to $2,400 psf by March 2014. 

At the end of the first quarter, there was a total supply of about 998,000 sqm GFA of office space in the pipeline.

Muneerah Bee, Senior Journalist at PropertyGuru, wrote this story. To contact her about this or other stories email muneerah@propertyguru.com.sg

Source: CommercialGuru.com.sg

Date Post: 28/4/2014
ProPerty Market News