Robust office rental growth to falter in 2H15 on back of massive space availability

Over 3.9m square feet of space will be available in 2016.

Office rents jumped 9.8% in 2014 as landlords continued to take advantage of the lull in new inventory., but analysts caution that the robust growth will not be sustained in 2015 .

According to CIMB, rental growth is likely to come under pressure in 2H15 onwards, as landlords start to market the huge incoming supply of 3.9m sq ft in 2016, which is equivalent to 2-3 years’ supply, more actively.

“Looking ahead, we think that rents will continue to improve in early 2015, with little new incoming supply. However, pricing ability in 2015 would be more moderate than in 2104,” stated CIMB.  

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