Chart of the Day: Find out why it's unlikely for business park rents to drop big-time

Despite the burgeoning supply.

According to Nomura, the observations suggest the higher supply is largely driven by robust demand for business park space in the One North area.

"In addition, we note the increase in business park rents has mostly kept pace with the rise in decentralised office rents (decentralised office rents 1.45x business park rents as of end-4Q13, in line with the average multiple since 2000)," Nomura said.

Here's more:

We believe new high-spec office buildings in decentralised areas completing in 2014F, such as JEM and Westgate in Jurong East, could command premium rents (Westgate, for instance, was sold for c.SGD1,900psf in January and an initial yield of 3.5-4% would imply an average rent of SGD7-8psfpm, vs. the current average decentralised office rent of c.SGD5.50psfpm), which could in turn provide additional buttress to business park rents.

As a result, we think it is unlikely for business park rents to fall significantly in 2016F, notwithstanding the projected supply, and we expect overall business park occupancy to remain above 85% by end-2016F.

Also Read

One Sophia sells 30% of units at weekend launch

SLA launches tender to revitalise Tanjong Katong Complex

Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

I want to download the media kit