Supply crunch sees CBD office rents rise
Limited supply is pushing up rents for offices in the central business district (CBD) but looming interest rate rises are deterring investors from buying.
Average CBD rents expanded 4 per cent to $9.96 per sq ft (psf) per month in the second quarter over the preceding three months, mainly due to the “stable take-up” by firms amid tightening vacancies.
The increase was at a slightly faster rate than the 3.9 per cent rise in the first quarter this year from the previous quarter.
CapitaGreen, a 700,000 sq ft office tower in the CBD, is expected to be completed by the end of this year.
The office components of mixed developments such as South Beach near Raffles Hotel, DUO in Bugis and Marina One in Marina Bay could also be completed within the next few years.
The average price of CBD office space inched up 0.5 per cent in the second quarter from the three months before to $2,445 psf.
However, other analysts say office rental growth could be less than expected.
Source: The Straits Times – 24 June 2014