Singapore Office Rent to Gain Most in Four Years: Southeast Asia

Singapore’s prime office rents are set to post their biggest increase in at least four years in 2014, and may extend gains this year in a supply-constrained market. The office rent index for prime areas rose 8.7 percent in the first nine months of last year, heading for its largest gain since 2010, when it was up 12 percent, according to data from the Urban Redevelopment Authority. A limited supply of new prime office space over the past two years, compared with demand from companies seeking central office locations, may push 2014’s rental increase as high as 14 percent, according to real estate broker Savills Plc. (SVS) The same restricted supply will probably prevail this year and next, even if demand cools a little as the economy slows. “Going into 2015, demand would almost match supply for prime office space, making the office market fundamentally sound,” said Alan Cheong, a Singapore-based director at Savills. He said landlords are in a strong position to resist demands for lower rents due to the limited amount of new space available this year and next. Singapore’s economy expanded less than economists estimated last quarter after its manufacturing industry weakened with slowing growth in China and an uneven global recovery. Gross domestic product rose an annualized 1.6 percent in the three months to Dec. 31 from the previous quarter, when it expanded 3.1 percent, the trade ministry said on Jan. 2. To contact the reporter on this story: Pooja Thakur in Singapore at pthakur@bloomberg.net

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