Prime Office Rents Up 3.3% In August

Source : The Business Times, September 18, 2007

Raffles Place buildings led rise, with average rents there climbing 5.6%

PRIME office rents in Singapore climbed some 3.3 per cent in August to hit an average of $12.21 per sq ft per month (psf pm), Cushman & Wakefield's new office report shows.

The property firm used a basket of about 50 buildings to calculate the average rent, managing director Donald Han said.

The firm, which also tracks the office rents for the top 25 Grade A office buildings within the larger basket of properties, said that rents for the selected 25 buildings rose to an average of $12.28 psf pm as at end-August, from $12.07 psf pm in July - up 1.7 per cent.

Last month's rise in prime office rents was led by buildings in Raffles Place, Cushman & Wakefield's data shows. Average rents in Raffles Place climbed 5.6 per cent in August to hit $13.68 psf pm. Rents in the Orchard and Scotts area also rose some 2.2 per cent to $9.76 psf pm, while at City Hall/Marina Centre/Bugis, rents rose 0.3 per cent to $12.22 psf pm.

Mr Han expects overall prime office rents to hit $13.50 psf pm by year-end. However, rents at the top tier of Raffles Place properties will hit $19 psf pm by end-2007, he said.

He added that the US sub-prime crisis, which rattled markets here in August, will have little impact on the office market for the rest of the year. 'Moving forward, you will still see an upside in terms of rentals,' Mr Han said. 'Sub-prime or no sub-prime, the fundamentals are still there for prices to keep climbing - there will still be a shortage of office space over the next few years.'