The Singapore office and retail property markets continue to be firm

The Singapore office and retail property markets continue to be firm, judging by separate releases from CB Richard Ellis and Knight Frank yesterday.

Knight Frank, in an update on the retail sector, said that rentals of prime shopping space in the Orchard Road belt as well as the Marina Centre, City Hall and Bugis locations were stable in the first quarter of the year compared with levels at the end of last year.

‘These areas were not affected by the recent surge in new retail space. Renewals of leases were also not at significantly higher rental rates,’ the property firm said.

‘As a result, rentals in those areas were stable,’ the report added.The average gross monthly rental of prime retail space in the city fringe edged up 0.4 per cent quarter on quarter to $22 psf a month in Q1 2007, with the opening of a couple of malls such as Square 2 and The Central towards the end of 2006 and early 2007.

In the suburbs, the gross average monthly prime retail rent rose one per cent quarter on quarter to $27.20 psf. Knight Frank said the completion of Ang Mo Kio Hub contributed to the increase.

‘Developers of some of the new malls in the Orchard Road area have begun to lease their shop units. There is room for further rental appreciation in Q2 2007. For the whole of this year, prime retail rentals are projected to increase by 8 to 10 per cent, while islandwide, rentals are expected to increase 3 to 5 per cent,’ Knight Frank said.

CBRE, in its office sector report, said that with supply remaining extremely tight, the vacancy rate for Grade A office space continued to fall, from 0.8 per cent in Q4 2006 to 0.4 per cent in the first quarter of this year.

Source: The Business Times, 04 April 2007