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S'pore office rents likely to rise 5-10% this year: Savills

Singapore office rents are likely to rise by 5 to 10 per cent this year, due to lack of new supply coming into the market, real estate firm Savills said on Thursday.

SINGAPORE: Singapore office rents are likely to rise by 5 to 10 per cent this year, due to lack of new supply coming into the market, real estate firm Savills said on Thursday.

"The overall vacancy rate of CBD (Central Business District) Grade A offices tracked by Savills declined for the fourth consecutive quarter, from 7.8 per cent at the end of 2012 to 3.4 per cent by the end of Q4 2013," Savills said in a statement.

It added that there was little new supply coming into the office market this year, with CapitaLand's CapitaGreen, the former Market Street Carpark, and City Development's South Beach Tower being the only large developments scheduled for completion by the end of the year.

"2013 saw a turnaround in overall CBD Grade A office rents, with a 3.9 percent growth after a contraction of 4.7 percent in 2012," the property services firm added.

Grade A space refers to more sought-after office addresses in the central region that come with the wide floor plates and high ceilings favoured by financial institutions.

"With limited supply, 2014 could well be the year of galloping rents." said Savills senior research director Alan Cheong.  

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