CBD Premium rents slump 6.8% in Q4

While occupancy fell to 93%.

According to Colliers International, CBD Premium and Grade A office rents have declined 6.8% YoY in 4Q16, down 11% since the last peak in 2Q15.

This came as occupancy in the said areas fell to 93%, led by the decline in Sheton Way, Bugis/Beach Road, and Marina Centre/City Hall. This reflects a tepid demand, Colliers said.

"We estimate net absorption in the CBD Premium and Grade A space of 449,000 sq ft. in 2016," it noted.

Colliers explained that with another bumpy year ahead, rents will continue to decline, albeit at a slower rate of 3-5% as CBD occupancy bottoms out.

"Post 2018, we believe that steady supply could enable a slow recovery of rents, so long as new international demand picks up back in 2017 and onwards," the research firm said.