How the completion of Asia Square Tower 2 will impact office rentals

Its pre-commitment level is now ~20%.

According to Maybank Kim Eng, their analysts think the supply dynamics will change again, once the 775,000 sq ft Asia Square Tower 2 is completed in around Sep 2013.

Currently, its pre-commitment level remains sub-par at around 20%, and when it gets completed, the ~600,000 sq ft of vacant space may lead to further downside pressure in office rentals.

Here's more from Maybank Kim Eng:

In addition, the impending additional supply from decentralized office space on CBD office rentals cannot be ignored.

High-quality decentralized developments like CapitaLand’s Westgate Tower are likely to draw tenants away from Grade B developments in the CBD, leading to a hollowing-out effect, potentially triggering more substantial declines in Grade B office rentals