Published:
Office rents in CBD to jump 14% in 2014
Supply completions to become sluggish.
According to CIMB, it expects average CBD office rents to nudge up by 4% from S$8.90 psf currently to S$9.25 psf by end-2013 and a more meaningful 14% yoy increase in 2014 to S$10.25 psf as supply completions taper off.
Here's more:
On the back of lower supply and falling vacancy, we believe that cap rates are unlikely to rise to previous downcycle levels even as interest rates rise. We lift our cap rate assumptions across the board by c.50bp to c.4.25% (in line with the historical average) and cut our capital value assumptions by 8-10% as a result.
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