Singapore leads Asia-Pac's prime office rental growth

20141120-bt-singapore-leads-asia-pac-prime-office-rental-growth-pic

SINGAPORE recorded Asia-Pacific's highest growth in prime office rentals of 19 per cent over the 12 months to end-September 2014. This was boosted by tenants' demand for good-quality space, which remains in limited supply as vacancy tightens.

The cities of Taipei, Wellington and Auckland were ranked next, recording annual growth rates of between 8 and 10 per cent, aproperty digest released by JLL on reported on Wednesday.

Quarter-on-quarter, Singapore's average central business district (CBD) rents rose 3.1 per cent toS$10.30 per square foot (psf) per month in the third quarter, a slight slowdown from the previous quarter.

Overall CBD net take-up stayed positive, with about 10,800 sq m of space taken up in Q3; vacancy fell from 4.4 per cent to 2.5 per cent.

Demand from financial institutions was mixed, with both expansion and consolidation activities. For instance, while European banks continued with their consolidation or decentralisation activities - mostly the moving of their back-end offices to the suburbs - Japanese bank Mizuho relocated to Asia Square Tower 2, a much bigger premises at 100,000 sq ft, in line with its overseas expansion.

Multinational companies continued to favour Singapore as a springboard into South-east Asia. General Motors, for example, moved its Asia-Pacific headquarters from Shanghai to the Republic's OUE Bayfront.

However, indicative en bloc capital values stayed flat in the third quarter on the back of a looming higher-interest-rate environment.

Source: Business Times, 20 Nov 2014