After 9 consecutive quarters of lacklustre showing in the prime office rental sector, rents of Grade A office spaces in the Central Business District (CBD) have finally risen last quarter by 1.7% to $8.51 psf per month. In Q1, overall office rents fell 3.4% and vacancy rates also rose slightly.
Offices in the Marina Bay district received the most attention from tenants with a huge increase in take-up. Rents here rose 5.8%, a very positive sign indeed when compared to the 1% decline in the previous month and the fact that 70% of the office spaces in Marina One have already been leased, even before the project reaches completion. Over at Raffles Place, prime office rents also rose 2.5%. Most of the tenants leasing office spaces in Q2 were from the technology, media and telecommunication and financial and professional services industries.
While Grade A office spaces were leased quickly last quarter, the same cannot be said for that in the city fringes and suburbs. Office rents in the city fringes and suburbs fell 0.6% and 0.2% respectively. This could also subsequently effect changes in the city fringe and suburban residential property markets. With property analysts predicting a 5% recovery for the market sector this year, will Q3 continue to show a price-rise?