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Office Listing
Market Review/Newsletter
CBD Map |
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Close to the peak, but expect continued growth for next 12 months
We have come across many more occupiers recently taking the view that office rates have peaked and that rentals will be coming down soon. We believe those companies who are expecting an imminent softening of the market could be seriously disappointed. Indeed delaying decisions on this assumption may not work in their favour as there could simply be less choice than today and the rate will be no lower.
We may be close to the peak but there is still a little bit further to go and rentals are unlikely to come down any time soon. There is no reason for rentals to soften at this stage. Supply is getting tighter every month, there is still healthy demand and there is no new stock coming on stream for at least another year. The bulk of the new space will not be coming available until later in 2010 and 2011.
It should also be highlighted that schemes scheduled for completion in 2009 are relatively small. 71 Robinson Road (July 2009) is only 16-storeys high. Straits Trading Building (September 2009) has a small floor plate of only 8,500 sq ft and Mapletree Anson (August 2009) is the only sizeable scheme at around 300,000 sq ft and half of that is under offer or reserved. The supply situation should still be a concern to all office users. Even the temporary office sites like 10 Raeburn Park and the old ITE Building on Alexandra Road are full. Other similar sites like 150 Cantonment Road are expected to be full by the end the year.
We expect rental increases to grind to a halt in the next 9 months leveling off at roughly 10% higher than what they are today. However there is unlikely to be an immediate softening of rates and the downward curve may only start around the latter part of 2009. Once rates do start to weaken we are expecting major adjustments with anticipated falls of around 30% to 40% over 2010/ 2011. |
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