DTZ highlights that average monthly gross rents in CBD fell 4.1% q/q to $10.40 psf in 3Q15, marking its first decline from an uptrend that began in 2013, amid headwinds in the external economic environment.
The property consultant attributed the weakness to confluence of China’s economic slowdown, and a less optimistic growth outlook for Singapore, with the official GDP forecast revised to 2-2.5% from the previous 2-4% range.
In 3Q15, CBD occupancy slipped 0.9ppt q/q to 95%. While the Shenton Way and Marina Bay areas slid, occupancy in Raffles Place up 0.4ppt to 96.7% from strong take-ups in newer developments like CapitaGreen.
Additionally, DTZ also notes that landlords are dishing out leasing incentives such as rental holidays and rebates to retain and attract tenants.
DTZ estimates another 2.6m sf of office space will be added in the CBD in 2016, which Maybank-KE estimates will be three times that of demand. Hence, the house is projecting office rents to drop 1%/10%/3% in 2015-17.
For now, Maybank-KE has the following ratings for office REITs:
CapitaLand Commercial Trust (Hold, TP $1.25)
Keppel REIT (Hold, TP $0.88)
Suntec REIT (Sell, TP $1.33)
No comments:
Post a Comment