Rents in Raffles Place/Marina Bay precinct averaged to $9.34 psf.
Average rents of Grade A+ buildings in Raffles Place and Marina Bay rose for the first time in eight consecutive quarters, Knight Frank.
Average prices hit $9.3 psf with a 0.2% QoQ increase in Q2.
Knight Frank said leasing interest within the Central Business District (CBD) rose due to more tenants trying to secure prime office space.
Tech giant Microsoft and shipping joint venture Ocean Network Express have committed to occupy 125,000 sqft. and 50,000 sqft. of office space in Q2.
Occupancy in Grade A+ buildings also rose from 97% in Q1 to 97.3%.
However, rentals on older office buildings have yet to recover.
"The 'flight-to-quality' phenomenon with first-wave tenant moving into the newly-built Marina One East Tower and UIC Building is starting to impact older Grade A office spaces, with some landlords of these buildings under pressure to backfill their vacated spaces," Knight Frank said.
Secondary spaces, currently occupied space that is available for lease from the existing tenant, also pressures landlords to look for new occupiers.
Consolidation activities within the banking and finance sector have released a total secondary space of 260,00 sqft., or 70% of total available secondary space in the CBD.
Consequently, the average rent of older buildings dipped 0.2% to $8.25 psf, marking the ninth month of decline.
Meanwhile, rentals in the Shenton Way/Robinson Road/Tanjong Pagar precinct rose 0.6% QoQ to $7.9 psf, higher than 0.5% QoQ increase in Q1 2017.
The completion of the Guoco Tower has helped uplift the appeal of Tanjong Pagar for international and local enterprises.
Average rent of Marina Centre/Suntec precinct dipped 0.8% to $7.92 psf. Occupancy moderated from 94.7% last quarter to 94.3%, due to relocation activities to other precincts and consolidation exercises by existing tenants.
Overall rents in the CBD stayed the same at $8.31 psf, as rentals of Grade A buildings in most precincts posted mixed-bag performances.
Do you know more about this story? Contact us anonymously through this link.