Rents Of City Fringe Business Parks Up 0.8%
SINGAPORE – Data from CBRE showed that average rents of business parks in the city fringe inched up by 0.8 percent to S$6.05 psf per month in Q3 2022 compared to the preceding 3-month period, reported the Singapore Business Review (SBR) on Wednesday afternoon (12 October, SGT).
On the other hand, the average rents of business parks in the rest of Singapore remained unchanged at S$3.65 psf per month.
CBRE said with the rents of city fringe business parks rising, the rental gap between the two business park submarkets continued to widen during the 3rd quarter of the year.
Aside from that, the real estate consultancy revealed that some landlords have increased their effective service charges in Q3 2022 because of inflation and more expensive utility costs.
However, CBRE said this may not have been passed through in the form of higher business park rents (which is inclusive of service charges) as demand for such properties remains highly price-sensitive, particularly for business parks with elevated vacancies.
Notably, the vacancy rate of city fringe business parks fell to 3.6 percent during the third quarter, while that for the rest of the island rose to 14.2 percent.
“Higher concentration of supply pipeline could continue to exert pressure on the Rest of Island submarket,” said CBRE.
“On the other hand, rents in City Fringe are expected to remain resilient given the lack of new options and potential spillover from the strong office rental recovery. Going into 2023, macroeconomic headwinds and a slowdown in the tech sector could weigh on demand,” added the real estate consultancy.
