In Singapore, the monthly prime Grade A office rental slide slows down in the second quarter of 2009.
According to property consulting group Jones Lang LaSalle (JLL), the monthly average rents of the prime Grade A office drop to $9.50 per square foot (psf) during the 2nd quarter, a 11 percent quarter-on-quarter slide, which is lower than the 28 percent quarter-on-quarter decline in the first quarter of 2009.
The recent decline is due to the overall slide of 48 percent from the peak of $18.40 psf in the third quarter of 2008. JLL is anticipating the continuous decline of office rents for the rest of 2009 and into the middle of 2010, as weak global demand and strong physical supply continue to surpass the market. Property consultants believe that the net demand stays in negative territory, thus the office market is not yet safe.
However, JLL’s head of markets in Singapore, Chris Archibold, notes that the silver lining is that Singapore will reclaim its attraction as a centre for global banks and MNCs and become more cost-competitive when they stabilised their headcounts. He adds that there has been a notable rise in the volume and leasing inspection enquiries lately, and a substantial number of these tenants are searching within the CBD core area.
The executive director of DTZ, Cheng Siow Ying, comments that a lot of good quality office spaces are becoming available at reasonable rents, posing attractive leasing opportunities.
The Executive Director of CB Richard Ellis, Moray Armstrong, has also noticed a "strong resurgence" of leasing pursuit in the last few months, but he believes that it does not represent positive office demand in reality.
“We can’t really call a recovery in the office market until demand turns positive and vacancy rates reduce significantly. It’s hard to imagine that will occur in the next 12-18 months, but there is a stronger case for the market turning 2011 onwards,” he said.