Spore among weak performing office markets in APAC: report

Office rents in Singapore slid in Q4 2015 amid the lacklustre business sentiment that has forced some companies to scale back operations, according to the latest report from Knight Frank.

At the end of December, gross effective rents in the city-state dipped 2.5 percent to US$88.6 per sq m on a quarterly basis. This represents a decline of 2.8 percent from the same period in 2014, and values may fall further in the next 12 months, said the consultancy.

Among the 19 Asia Pacific markets tracked by Knight Frank, New Delhi, Hong Kong and Mumbai recorded the highest quarterly rental gains of 7.9 percent, 4.1 percent, and 1.6 percent respectively.

On an annual basis, the top performers were Hong Kong (13.3 percent), New Delhi (11.1 percent) and Sydney which posted a rental increase of 9.2 percent.

On the other hand, the worst performers quarter-on-quarter were Tokyo (-7.8 percent), Jakarta (3.8 percent) and Perth, where rents fell by 3.4 percent.

On a yearly basis, Perth, Jakarta, and Singapore posted the largest rental decline of 13 percent, 8.9 percent and 2.8 percent respectively.

As a result, Knight Franks Asia Pacific Prime Office Rental Index inched up 0.1 percent in Q4 2015, while average vacancy fell 0.3 percentage points due to robust take-up.

Over the next 12 months, office rents are expected to increase in nine cities -- Melbourne, Sydney, Shanghai, Bengaluru, Mumbai, Tokyo, Seoul, Taipei, and Bangkok.

Conversely, it is forecasted to hold steady in five markets, namely Brisbane, Phnom Penh, Guangzhou, Hong Kong and New Delhi. But rents are anticipated to fall in Perth, Beijing, Jakarta, Kuala Lumpur and Singapore.

Nikki De Guzman, Editor at CommercialGuru, wrote this story. To contact her about this or other stories emailnikki@propertyguru.com.sg

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