See this, tenants: 826k sq ft of new office space to be available by 2015
As office rents continue on their upward trajectory.
According to DTZ, ~1m sq ft of office space will become available next year when tenants move out of existing buildings to their new offices, on top of the 0.55m sq ft of current shadow office space. All these supply sources will mitigate an anticipated supply gap next year.
A report by OSK-DMG reveals that there will be a net increase in office supply of only 159k sq ft next square, based on 826k sq ft of new office space expected to be completed in 2015 and factoring in the removal of existing stock from the office market at Equity Plaza (258k ft) and other buildings such as Keypoint in Beach Road (268k sq ft) and 2HR in Havelock Road (141k sq ft) for redevelopment or refurbishment. DTZ estimates that the Singapore CBD office rents are projected to continue their upward trajectory next year, though at a slightly slower pace of 10%- after an expected growth of nearly 15%for this year.
This reiterate’s OSK-DMG’s positive stance on the office segment in 2014-2015, with only CapitaGreen and South Beach Developments (both TOP end 2014) as the major buildings slated for completion.
The supply deluge will only come two years later with 5m sq ft of new office space, led by Marina One (1.9m sq ft), Guoco Tower (850k sq ft), Duo (570k sq ft) and F&N's Telok Ayer Street development (720k sq ft). We expect occupancy rate of 90-92% for the Downtown Core area (4Q13: 90%). Come 2016-2017 however, we expect occupancy rate to slide to 88-90% when the new office space comes on-stream, with rents rising 8-10% per annum in 2014 and 2015 before declining 2% in 2016.
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