Chart of the Day: Private office occupancy dipped 1% in 3Q

Spurred by an increase in office supply.

According to Credit Suisse, private sector occupancy fell 1.0 pp to 89.5% from 90.5% in 2Q13 (1Q13: 90.0%). This was primarily due to an increase in net office supply of 1,324,000 sq ft with the completion of Asia Square Tower 2 (only ~35% of its total 782,280 sq ft space pre-committed), The Metropolis Tower 1 and Nexus @ One-North during the quarter. 

With the meaningful supply, we believe that competition among landlords may persist, which may limit the rental growth outlook for the sector. However, given ~90% occupancy, we do not expect a correction in rents either.

As such, given the flattish growth outlook, we maintain our slightly neutral-to-negative bias on the office sector