Chart of the Day: Monthly rents for CBD Grade A offices hit $10.08psf in Q2
Rents may continue to rise as supply remains limited.
This chart from Savills shows that the average monthly rents of CBD Grade A offices located in the CBD edged up 1% QoQ to $10.08psf in Q2 from $9.99 psf in Q1.
Offices in Marina Bay recorded the most expensive grade A office rents at $13.12 psf, followed by rents in City Hall and Raffles Place which stand at $10.31 psf and $10.28 psf respectively.
Average monthly rents at Orchard Road and Shenton Way are at $9.58 psf and $9.32 psf. Tanjong Pagar and Beach Road/Middle Road rents are at $9.04 psf and $8.16 psf, respectively.
Also read: Office prices up 0.9% in Q2
“After an accumulated 12.7% growth over the six consecutive quarters from Q3 2017 to Q4 2018, rental growth has started to taper off in the first two quarters of this year, due to the gloomy global and local economic outlook and tenants’ resistance to rent hikes,” Savills said in the report.
Savills added that sub-markets saw rental growth range from 0.6% to 1.9% on a quarterly basis. The report continued that rents are not expected to fall in light of limited new supply in the pipeline from Q2 2019 to 2022.
However, the continuous expansion of flexible workspaces has countered risks arising from the substantial amount of secondary stock vacated by tenants’ relocations, such as HSBC’s current space at 21 Collyer Quay.