SINGAPORE - Rents of top-grade office space in Raffles Place and Marina Bay increased for the first time in seven quarters while occupancy rates continued to rise there, signalling that a recovery in the segment may be afoot.
Average monthly gross rents of premium-grade office space in these areas climbed 2 per cent in the three months to June 30 to $9.60 per sq ft (psf) from the previous quarter, according to Colliers International's latest quarterly research report on Monday.
This was the first rise in rentals for such office space since a sustained period of decline that began in the fourth quarter of 2011.
Mr Marcus Loo, Colliers International executive director of office services, said: "Office buildings located in the Raffles Place and New Downtown (downtown Marina) micro-market have continued to draw interest from tenants."
As the development of Marina financial district and supporting road and public transport infrastructure picked up pace, demand rose in the quarter, he added.
But in the broader Central Business District (CBD), the average monthly gross rent of both premium and Grade A office space was $8.42 psf during the second quarter, relatively unchanged from $8.41 psf in the previous quarter.
Mr Loo noted that as tenants still favoured better-quality office space, landlords were able to either maintain or increase rents in the CBD.
While office rents were stabilising in the broader market during the quarter, Mr Loo said the recovery is more encouraging in premium- grade developments.