Chart of the Day: Guess how much office space is in the pipeline next year

There will be 2.5m sq ft. of space available in Core CBD next year.

In the near term, office REITs is bound to suffer from falling rents, as some analysts predicted, due to the overwhelming supply.

For next year, there are about 3.2m sq ft. of space up for grabs, 2.5m sq ft. of which is in core CBD.

Maybank KimEng noted that Office REITs may hit a potential bottom in the early 2018, as supply thins out.

"Low supply of prime office space in 2018-20 should give the market ample time to absorb excess space in the market. Valuations are supportive with Office REITs trading at a significant discount to their underlying assets. This is despite strong institutional interest in office buildings," the firm noted.

Maybank said there are strong bids seen at the recent Central Boulevard land tender, suggesting high replacement cost for offices. 

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