Business parks command strong Q2 leasing demand

Business parks command strong Q2 leasing demand

SINGAPORE - Business parks saw robust leasing demand in the second quarter, with tenants signing up for some developments under construction well before completion, according to a report from property consultancy CBRE.

Among them, Fusionopolis Phase 2A has only 10 per cent of space available for lease, after Jurong Town Corporation reserved "a significant portion" of space at the development, the report released on Tuesday showed.

Tenants are also in talks for as much as 20 per cent of leasable space at Fusionopolis Phase 5, 18 months ahead of its completion, said CBRE.

Overall, business parks are reporting pre-commitment from tenants for about 40 per cent of the new supply.

CBRE also noted that about 5.43 million sq ft of leasable space in business parks is expected to be added from now until the end of 2016. The completion of DBS Asia Hub Phase II and Rigel Technology's research and development centre next year will account for most of the supply.

Meanwhile, leasing demand at completed business parks held steady during the second quarter. The vacancy rate at these parks fell slightly to 6.2 per cent, from 6.3 per cent in the previous quarter, as tenants embarked on their expansion plans.

Samsung took up more space at Mapletree Business City, while biomedical firm Covance expanded its laboratory space at The Synergy, CBRE noted.

Despite the strong pipeline of space in the next four years, the possibility of over-supply remains low due to the pre-commitment level, said CBRE.

In addition, CBRE noted that demand will be driven by companies moving from the central areas towards business parks. The ample supply of office space over the next few years is also expected to stabilise rents at business parks.

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