Rental rates for business parks predicted to correct by 5-7%

Most especially so for older parks.

According to CIMB, business parks rental are expected to weaken. Going forward, with a relatively high supply of business-park space in 2013 (1.3m sq ft) and 2014 (1.2m sq ft) together with an expected pre-commitment rate of 61% and 57% respectively, CIMB expects business parks’ rental rates to correct by 5-7%, particularly for older parks as tenants seek higher specifications, in the near term through 2014.

"The total value of transactions also dropped as a result of government measures. Jul’s jump in transacted values could be traced to several big-ticket transactions as a result of the listing of Soilbuild, the latest listed industrial REIT in
Singapore," CIMB said.