Rents at Singapore downtown offices rose 14% last year: JLL report

Singapore Central Business District (CBD) rents rose over 14 per cent last year, the strongest across Asia Pacific, said a JLL report on Thursday. -- PHOTO: ST FILE
Singapore Central Business District (CBD) rents rose over 14 per cent last year, the strongest across Asia Pacific, said a JLL report on Thursday. -- PHOTO: ST FILE

SINGAPORE - Singapore Central Business District (CBD) rents rose over 14 per cent last year, the strongest across Asia Pacific, said a JLL report on Thursday.

Demand was driven by a mix of expansion and relocation activity across various occupier segments, including small financial institutions, it noted.

Consumer goods, IT and social media occupiers also provided some expansion activity with LinkedIn, Facebook and Twitter moving into the CBD over the quarter.

Net take up in the CBD remained positive at over 624,307 sq m, while overall CBD vacancy rate remained stable at 6.1 per cent.

In the quarter, supply was added in the form of CapitaGreen, which has 700,000 sq ft of net lettable area.

Office demand could rise with the growth of IT and business advisory services here, on the back of the formation of the Asean Economic Community this year, it added.

The report said however that rental growth is likely to slow, despite the tight supply situation this year.

This is due to upcoming supply in 2016, for which pre-leasing is likely to start this year. A large amount of office space, especially from Marina One, is expected to add at least 1.5 million sq ft to the market.

"This is likely to add pressure on landlords to lock-in existing tenants by offering attractive rental rates, or longer lease periods," JLL said.

It added that modest economic growth of 2.8 per cent last year and a forecast for below trend growth of 3 per cent this year, as well as uncertainties in major economies, "may prompt some companies to adopt a more cautionary approach towards expansion."