Demand for office space in S'pore expected to increase

Demand for office space in S'pore expected to increase

SINGAPORE (Reuter): Demand for office space in Singapore is expected to be robust, allowing rentals to move up in 1996, property consultant Jones Lang Wootton (JLW) said yesterday at a seminar on construction and property.

"The outlook for the office market is less buoyant compared to the heady rises in rentals and capital values in 1994 and the first half of 1995," JLW executive director Steven Choo said.

"However, there is still upside potential as demand is expected to be robust," he said.

New office supply for 1996 was projected at 2.5 million sq ft (232,250 sq meters), 39.5 percent of which was located within the Central Business District (CBD).

Choo said high occupancy would pressure rentals to move upwards despite the completion of large office projects such as Suntec City Towers 1 and 2 and Millennia Tower.

The Singapore office market was still in the upward phase of the property cycle and was likely to continue to grow but at a moderate pace, he said.

"While overall office occupancy costs have gone up significantly since the beginning of 1994, office rentals in Singapore are still relatively competitive on a global basis.

"As at end-September, prime office occupancy costs in Hong Kong stood at US$109 per sq ft (psf) per annum compared to Singapore's US$80 psf.

In Tokyo, the average annual office occupancy cost stood at US$121 psf."

Emerging office hubs in regional and sub-regional centers outside the central business district were also gaining in popularity.

"Despite the emergence of new office hubs, future office demand in the next four to five years is likely to outstrip present supply in the city," Choo said.