Share
Office rent in Singapore rose 4.7% in 4Q2010, slowing from the 6% achieved in the preceding quarter, according to Urban Redevelopment Authority statistics released on Jan 28. For the full year, office rent was up 12.6% when the Singapore economy grew at a record 14.7%.
URA data shows that median rent for so-called Category 1 office space was S$8.72 psf per month in 4Q2010, up from S$8.45 psf pm in 3Q. Meanwhile, Category 2 rent was recorded at S$5.29 psf pm in 4Q2010, also up from S$5.05 psf pm in 3Q. URA notes that Category 2 accounts for 80% of the office space stock in Singapore and is therefore a more accurate reflection of typical office cost to businesses.
Prices of office space moved in tandem with rental rates. It was up 5.1% in 4Q, a slower pace compared with 6.2% in 3Q. For the full year, it was up 18.9%.
The office market experienced a strong net take-up of 1.65 million sq ft for 2010, with the Downtown Core planning area accounting for 1.43 million sq ft. As at end-4Q, there was about 11.4 million sq ft of office space in the pipeline, with 10.33 million sq ft expected between this year and 2014.
CBRE reported that occupancy rates increased in 4Q2010 off the back of strong demand even as Singapore’s economic growth eased slightly. As at 4Q2010, the vacancy rates for the Core CBD, Fringe CBD and Decentralised markets were 4.7%, 6.9% and 5.1% respectively. The corresponding rates in 3Q were 4.8%, 7% and 6.5% respectively and 8.8%, 14.3% and 10.4% respectively for end-2009.
Grade A vacancy rate dipped to 2.7% in 4Q2010 from 2.8% in 3Q2010 — a notable turnaround from the 6.2% in 4Q2009. The increase in occupancy rates was buoyed by strong demand — annual Grade A take-up rose to 1.47 million sq ft in 2010 from 129,127 sq ft in 2009.
Singapore’s retail space market is also on the rise. In 4Q, overall retail rent was up 1.7% — accelerating from 0.8% in the preceding quarter. For the full year, retail rent was 2.9% higher. Median retail rent in the Orchard Road area in 4Q2010 was S$10.43 psf pm, whereas corresponding rates for the Rest of City Area (which refers to places such as River Valley Road, Clemenceau Avenue and North Bridge Road) and Outside City Area were S$6.42 and S$5.62 psf pm respectively.
Meanwhile, shop space prices rose 1.4% in 4Q, compared with 1.3% in 3Q. For the full year, it was up 8.6%. Net increase of shop space during 4Q was 613,548 sq ft — up from 64,584 sq ft in 3Q but vacancy rates dropped from 6.5% to 5.8%. URA is projecting a total supply of 3.175 million sq ft coming onstream between this year and 2014.
Industrial space market also benefited from the economy’s growth, with a full-year gain of 23.7% in prices for so-called multiple-user factory space. In 4Q, it was up 6.3% — a slowdown from 8.8% in 3Q. Rent of similar type of industrial space in 4Q was up 3.4%, compared with 5.3% in 3Q. Full-year rental rate was up 11.7%, says URA.
Net increase in occupied factory space was 1.9 million sq ft for 4Q, down from 2.51 million sq ft in the preceding three months. Vacancy rates in the same period were 7.2%, an improvement from 7.5% as at end-3Q. URA is seeing a total of 28.74 million sq ft of factory space in the pipeline to 2014.
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 845, Feb 14-20, 2011
