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Commercial rents recovering in Singapore | 28 June 2013

Commercial rents recovering in Singapore | 28 June 2013

Singapore’s commercial rental rates are beginning to recover from the slump seen in the last quarter of 2012.

That’s according to the latest real estate report from Cushman & Wakefield, which revealed that rental rates for office space within Grade A locations grew by 4.2 per cent in the second quarter of 2013. The average rate now stands at S$9.03 a square foot per month.

Vacancy rates for Grade A office space are on the rise as well. The improvements have been partly attributed to the increasing variety of tenants. CBRE Research’s Desmond Sim told that take-up isn’t limited to financial institutions any more.

He said: “You have complimentary services like insurance, you’ve got legal all coming in to take up Grade A stock within Marina Bay and Raffles Place.”

Elysia Tse, strategy vice president for Aviva Investors Asia Pte., agreed with Sim’s view – telling that the market has become a lot more “diversified”.

Sim also explained how the fact that demand is outweighing supply is pushing rates upwards, so companies need to take action now to secure a reasonable rate. In fact, in 2015, no new Grade A commercial space is set to be created – so supply is set to dry up even further. Over this year and next, though, the Asia Square Tower II will be erected, as will CapitaGreen.

Cushman & Wakefield’s managing director of research for Asia Pacific, Sigrid Zialcita, added that take-up on commercial space has been “brisk”. Zialcita concluded: “Going forward, we see very healthy leasing occurring in this [sic] properties.”

The views expressed in this post are those of the author and are not necessarily those of Qube Global Software. All facts are verified where possible directly by the author.

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Posted by Matt Roobol

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