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Among the Grade A office space submarkets in Singapore, those in Beach Road saw the highest year-on-year growth of 19.3 percent to $8.35 psf per month in Q3 2018, revealed Colliers International’s latest office sector report.
This was followed by Shenton Way/Tanjong Pagar and Raffles Place, where rents increased by 18 percent and 16.1 percent respectively to $9.3 psf per month and $9.65 psf per month.
On the other hand, Grade A office rents in Orchard Road and City Hall rose by 11.1 percent and 10.6 percent to $8.85 psf per month and $9.26 psf per month during the third quarter.
But overall, it is premium tier Grade A office space in Raffles Place/New Downtown that recorded the largest annual growth of 19.3 percent to $11 psf per month.
As of the third quarter, rents of Grade A and premium office space in Singapore’s central business district (CBD) climbed 12.1 percent, with Colliers expecting full-year growth to reach about 14 percent.
The property consultancy said this forecasted growth will mark the highest annual increase since 2010 and the first double-digit yearly gain since 2011.
“We expect the steady upward rental trend to persist over the next two years, with average rent rising an estimated 8.0 percent year-on-year in 2019, and a further 5.0 percent year-on-year over 2020,” said Colliers’ research head Tricia Song.
“However, we acknowledge the risk that our rent forecasts may prove too high if turbulence in stock markets continues and results in reduced demand from finance sector occupiers, which account for about 45 percent of Grade A office space in Singapore’s CBD.”
For Q4 2018, only one new office tower is anticipated to be completed – 18 Robinson in Raffles Place, which offers 136,000 sq ft of office space.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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