Central region office rents up 3.3% in first quarter

Office landlords had something to cheer about in the first quarter, with rents rising in the central region, but the tale of woe continued for the owners of retail space.

Those central office rents rose 3.3 per cent in the first three months of this year over the last quarter of 2020, which saw a drop of 3.5 per cent.

However, office space prices in the central region contracted 2.7 per cent in the first quarter, Urban Redevelopment Authority (URA) data noted yesterday.

This narrowed from the 3.1 per cent decrease seen in the fourth quarter of 2020.

There was a total supply of about 761,000 sq m gross floor area of island-wide office space in the pipeline as at March 31, compared with 770,000 sq m in the previous quarter.

The amount of occupied office space fell by 19,000 sq m of net lettable area in the first quarter compared with a rise of 2,000 sq m in the previous three months.

Office space stock fell by 9,000 sq m in the first quarter compared with a decrease of 13,000 sq m in the prior quarter.

As a result, the island-wide vacancy rate edged up to 11.9 per cent as at March 31, from 11.8 per cent at Dec 31, 2020.

There was little to cheer about in the retail sector.

Central region rents slid by 4.4 per cent in the first three months of the year compared with the fourth quarter of last year, when they dropped 5.2 per cent.

URA data showed that prices of retail space in the central region dropped 3.2 per cent in the first quarter, up from a 2.1 per cent fall in the previous three months.

There was a total of 428,000 sq m gross floor area of retail space island-wide from projects in the pipeline, against 426,000 sq m in the previous quarter.

More space being taken up helped ease the island-wide vacancy rate to 8.5 per cent as at March 31, from 8.8 per cent as at Dec 31.