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Grade A office rents in Singapore increased 11.9 percent year-on-year and 1.4 percent quarter-on-quarter to $11.30 psf pm.
UOB Kay Hian (UOBKH) believes Keppel REIT will maintain a positive rental reversion for its Singapore office portfolio, reported Singapore Business Review.
This comes after the REIT’s management revealed that average rents for expiring leases stands at $10.70 per sq ft per metre (psf pm) for this year, $9.70 psf pm for next year and $9.60 psf pm for 2021.
Its Singapore portfolio has a committed occupancy rate of 98.9 percent.
Citing a CBRE report, UOBKH noted that Grade A office rents in Singapore increased 11.9 percent year-on-year and 1.4 percent quarter-on-quarter to $11.30 psf pm, while leases committed reached 272,900 sq ft in the first half of the year.
“Most leases concluded were in Singapore where the average signing rent was $11.93 psf pm, above market average for Grade A office space in core CBD,” said UOBKH analysts Loke Peihao and Jonathan Koh.
Meanwhile, Keppel REIT’s purchase of 99.4 percent shares in T Tower in Seoul has been finalised.
“With an NPI yield of 4.7 percent, T Tower is expected to boost pro-forma 2018 distribution per unit (DPU) by 2.5 percent to $0.570 based on debt financing,” noted the analysts.
The newly acquired property in Korea was completed in 2010 and boasts a 100 percent committed occupancy.
“The outlook for Seoul’s office market appears robust, with office investments reaching a historical high in 2018 amid ample liquidity and positive investment sentiment,” said the analysts.
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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