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OCBC Investment Research (OIR) expects Grade A core CBD office rent to increase this year, before posting a moderated growth next year, reported Singapore Business Review.
This comes as leasing momentum for the office sector has been on an uptrend, with core CBD office rents rising by 3.5 percent quarter-on-quarter to $10.45 psf per month during the third quarter of 2018, said OIR citing data from CBRE Research.
Rents for Grade B core CBD submarkets also rose 2.6 percent quarter-on-quarter to $8 psf per month.
For the first nine months of 2018, Grade A and Grade B core CBD office rents jumped 11.2 percent and 7.4 percent respectively from their end-2017 levels. Both markets also saw occupancy rates expand by 0.5 percentage points to 94.6 percent and 94.7 percent respectively.
OIR expects office space demand for the said submarkets to come primarily from co-working operators, media and technology (TMT), telecommunications, financial services and business consultancy sectors.
“We expect core Grade A office rentals to end 2018 with an increase of 13 to 15 percent,” said OIR. “Thereafter, in light of a higher base and expected slowdown in global economic conditions, we forecast rental growth to moderate to five to eight percent in 2019.”
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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