Office rents unlikely to repeat pre-crisis tripple growth

Office rents down to less than S$ 2 psf from a peak of S$18.80.

According to DBS Vickers, compared to the boom times from 2006 to 2008 where office rents climbed by over 3x to a peak of S$18.80, the outlook moving forward is muted.

"The recent quarter’s results had positives signs with occupancy remaining high at 97% and rents holding steady despite the shrinking demand," it said.

Looking ahead, the operational performance for the sector should be relatively stable with only c.3% of the office reits (in terms of net lettable area (“NLA”) being up for renewal for the rest of FY12, it said.

"Suntec Reit and CCT have also taken proactive leasing strategies to lock-in FY13 leases. The trend of negative rental reversions is likely to stabilise and turn positive as expiring rents move pass 2008 peak rents in the coming quarters, we however do not expect the office sector to achieve previous peaks in 2008," it noted.