The latest report from CB Richard Ellis stated that office rents turned around in the second quarter of 2010 due to a dramatic economic recovery and pent-up demand.

The research consultancy reported a rise in Core & Fringe CBD rentals even though there are ‘some lingering concerns over the volume of impending supply’.

“Prime office rents grew 3.0 per cent in Q2 2010 to average $6.90 psf/month from $6.70 psf/month in the previous quarter. Grade A rents rose 5.6 per cent quarter-on-quarter to average $8.45 psf/month. Average Prime and Grade A rents grew by 2.2 per cent and 4.3 per cent in H1 2010 respectively,” stated the reports.

Moray Armstrong, Executive Director, Office Services, CBRE said, “Leasing momentum remained strong in part due to pent-up demand from MNCs which were finally in a position to act on their space needs. The virtual year-long hiatus post September 2008 has undoubtedly passed. With confidence restored in late-2009, decision-makers initiated space planning, leading to a pickup in requirements and in turn increased leasing volume in H1 2010.”

He added, “The outlook remained favorable as underlying local market conditions and business confidence is strong. The only caution at present arises from external macroeconomic issues such as EU debt. This could serve to dampen Singapore’s economic growth, leading to a slightly lower level of leasing activity in H22010. Nonetheless, medium-term demand is expected to remain positive as business expands and MNCs continue to view Singapore as one of the few growth stories to help counter the more sluggish markets in Europe and the US.”