Rents of CBD office spaces climb 3% as companies upgrade
Rents of Grade A office spaces in the Central Business District (CBD) has risen 3% in the first quarter of the year. Despite a slight shift from the 4.3% and 4.2% quarter-on-quarter increase in the second half of 2017, the continued increment has boosted investor confidence.
Across the board, office rents have increased. The average monthly gross rent for Grade A office space in Marina Bay rose by 3.3% to the current $10.84 psf.
The sub-market at Marina Bay remained competitive while that at Raffles Place, Shenton Way, Tanjong Pagar and Marina Centre all fared well with increments of 2.7% to 3%.
Grade A office space monthly rents at $9.51 psf
More companies are leasing these prime office spaces. And this is notwithstanding the fact there there are only 2 office developments due for completion this year in the CBD – Frasers Tower and 18 Robinson. Tenants have pre-committed to more than 60% of the 0.8 million sq ft of leasable space.
As companies from various industries continue to upgrade their premises, industry experts expect leasing demand to remain robust throughout the year. There may not be any new Grade A office spaces entering the market in 2019, hence this year may see smaller occupiers taking up these office spaces. Many of the major tenants may already have locked in their premises prior to 2018.
Global economics and political forces will naturally have an effect on the commercial rental market. Thus it will also be a wait-and-see game with the trade tariffs situation between the United States and China.