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S'pore office rents downtrend continues in Q2: Colliers

by Cheryl Tay

Amid the challenging global economy, Singapore's office rents continued to fall in Q2 2012, according to the Asia Pacific Office Market Overview report by Colliers International.

However, the rental decline has moderated thanks to a "temporary relief from a hiatus of major new office completions for the rest of 2012", as well as improved economic performance, added the report.

In the CBD, average monthly gross rents for Grade A office space dipped 1.1 percent quarter-on-quarter to S$8.45 psf, compared to a 4.3 percent drop in the last quarter.

Colliers noted that the decrease in Grade A office rents "boded well for the market", as it helped develop Singapore's competitive edge as a regional business hub while enabling companies to secure office premises at cheaper rents.

With this, overall CBD Grade A office occupancy rates rose to 92.0 percent in Q2 2012, from 90.9 percent in the previous quarter.

Looking ahead, office rental is expected to continue its decline through H2 2012, on the back of the uncertainty in the Eurozone and a possible supply overhang.

"However, the pace of decrease will slow down as Singapore strengthens its position as a compelling regional business hub," said Colliers.

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