_Singapore: Drop in availability continues to support office rental growth in Q3 2017
Grade A+ office space rents saw a slight increase of 0.2% at Raffles Place / Marina Bay precinct in Q3 2017 with a decline in space availability for lease by 0.5% q-o-q. While there was no major take-up announced in Q3 2017, Grade A+ rents upheld given the lack of new supply over the next two years.
Grade A office space rents saw increase across several precincts, with Shenton Way / Robinson Road / Tanjong Pagar precinct witnessing the highest increase by 0.6% q-o-q in Q3 2017, with a significant drop in availability by 4.2% q-o-q.
Notable Grade A office take up in the quarter include 40,000 sq ft of office space at Frasers Tower by professional services firm Arup, and 36,000 sq ft of office space at Centennial Tower by co-working operator The Great Room.
Major secondary space in the Central Business District also saw a reduction by 10.7% q-o-q to 335,000 sq ft, reflecting sustained demand for prime office space. For example, co-working space provider Justco, took up some 22,000 sq ft of secondary space in Ocean Financial Centre.
Prime grade office space rents and availability across other precincts remained flat without any major activity.
Exhibit 1: Average Office Rentals, by Key Precincts in Q3 2017
Source: Knight Frank Research
(A) Rents are based on transacted leases and on a lease term of at least three years and are expressed as values rounded to nearest 10-cent. (B) Rents are estimated based on leases of a whole-floor office space on the mid-floor levels of office properties, and taking into account rent free period and other concessions. (C) Availability of Office space for lease is based on Knight Frank Research basket of office buildings tracked in each respective precinct.
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