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Office rentals are expected to increase by a further 20 - 25%
this year based on continued strong demand and a critical tightening
of supply. Many companies in Raffles Place are paying historically
low rates because they moved in 2004 at the bottom of the market. A
large number will be faced with substantial increases from $6.00 per
sq ft to $13.00 per sq ft and resistance to the new rates is
expected.
However, the alternative more competitive leasing
options have also risen in tandem and the choice has become far more
limited. Companies will need to find compromise solutions but this
might not be that simple. They could either split their operations
moving the back offices out of town, though supply out of town is
also tight, or move into smaller more efficient space or be more
flexible in terms of acceptable locations.
Top
Prime office rentals are predicted to be around $15.00 per sq
ft by April 2008
Prime office rates for top
Grade office buildings are expected to reach around $15.00 per sq ft
by April 2008. Good quality buildings in secondary locations could
command rates in the region of $10.00 per sq ft and the older grade
C buildings might be in the region of $5.50 - $6.50 per sq ft. By
the end of 2008 they could be reaching peaks of up to $17.00 per sq
ft. |
