Much for pre-leasing activity is predicted to be built in greater-quality buildings and the rent growth is to be led by grade A.
Grade A CBD rent rises
It is noticed that the uptick in CBD leasing activity in 2013 has to be continued with the same momentum next year. While European and U.S. banks’ office demand may take longer time to return. It has been observe that the strengthening interest from Asia and Pacific financial institutions and mostly from the Japanese banks.
Existing Grade A constructions are now full or over 95% of them are occupied. The majority of new lettings are mainly from buyers of less than 30,000 sq feet.
Banks Lease contribute to rent rise
Angela Tan, the DTZ’s regional head has said that some Japanese banks such as Norinchukin, Mizuho and SMBC are expanding in Singapore. He also added that from the Japan offices have reports that other major Japanese banks are willing to enter the Singapore market.
The CBRE data has shown the 2013 is going to end with a 2% rent rise in monthly average rental value for CBD core (Grade A) office space to $9.75 per sq feet, stagnation in first 3 quarters at $9.55 per sq feet. CBRE’s CBD Core (Grade A) baskets cover the greater quality office buildings in Marina Bay, Marina Center and Raffles Place.
According to JLL’s data, 2013 is going to end with nearly 1 to 1.1 million sq feet net increase in island wide office, 30% shy of 20 year average annual take up of 1.6 million square feet and nearly half of the two million sq feet last year.
Weaker demands from FIs’ front operations is also behind contraction in average office lease-size for major new projects of about 57,000 sq feet in 2010 to 18,700 sq feet in 2011 and about 23,800 sq feet in the year 2012. It is been predicted that the figure for 2013 will be same as last year, but it will start increasing next year, as the island wide total increase in office demand to rise around 1.4 to 1.6 million sq feet, as Singapore’s positioning and Asian’s economic growth are the hub for various industries.
55,000 sq feet leased to SCB (Standard Chartered Bank) will be available next year at Six Battery Road. About 50,000 sq feet of excess space is bought by Barclays in Marina Bay Financial Center Tower 2, around 29,000 sq feet at the Eightrium@Changi Business Park which might be available in March.