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Office rents to continue to rise as there is no sign of abatement in supply crunch.
Office rents in Singapore increased 1.5 percent quarter-on-quarter during the second quarter of 2019, with gross effective rents reaching $10.79 per sq ft per m (psf pm), reported Singapore Business Review citing JLL.
“Rents continued to head north although at a moderate pace, as occupiers spent more time reviewing their space options amidst a multitude of factors including limited space options and decade-high rent,” said JLL.
Oxley’s $1.02 billion divestment of the Chevron House was the most notable office deal in Q2. With a net lettable area of 24,273 sq m, the 32-storey property comprises 27 levels of office space as well as a five-storey retail podium.
Other notable office transactions in the quarter were the sale of a 50 percent stake at Frasers Tower for $982.5 million and the $395 million sale of 7&9 Tampines Avenue.
JLL noted that office stock within the central business district hit 31.8 million sq ft in Q2, while capital value stood at $2,950 psf NLA.
With this, JLL expects office rents to continue to rise as there is no sign of abatement in supply crunch.
Meanwhile, prime retail rents within the Orchard and suburban submarkets held steady in Q2 while rents in the Marina submarket declined due to the introduction of rent-sensitive activity-based tenants.
Gross effective retail rents stood at $33.52 psf pm.
“Rent growth of prime floor spaces are expected to be subdued. Capital values are expected to move in tandem with rents, keeping yields relatively stable at near term,” said JLL.
Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg
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