The office rental market is looking up, according to property consultancy Jones Lang LaSalle (JLL). It showed a quarter-to-quarter uptick for the first time since 2011. For the quarter ended June, the net effective rents of Grade A space in Raffles Place turned in a marginal increase of 0.6%, but still showed a 3.1% year-on-year decrease. Average rental for prime space at Raffles Place for 2Q2013 is US$720 per sq m per year or about $7.13 psf per month. JLL believes that the small increase is due to limited take-up. On the other hand, office space capital values in Raffles Place rose 1.9% for 2Q2013, fuelled by demand from local investors. Average values stand at US$22,251 per sq m or $2,646 psf. Using figures from URA, we note that median rental in Downtown Core and Orchard Planning Area for 2Q2013 reversed a downward trend to reach a 0% Q-o-Q change. Median rentals have been steadily declining since 2012 as evident in Table 1.  

Table 1: Median Rentals and Q-o-Q Change for Category 1 Office Space

Source: URA   Moving onto median prices, the performance is relatively better with positive price increase for most quarters except in the second quarter of 2012.  

Table 2: Median Prices and Q-o-Q Change for Office Space in Central Area

Source: URA   With rentals showing signs of picking up, it might be more cost-effective for businesses to own their own premises. Further with the residential market slowing, property investors might shift to the office segment, price of offices could be jacked up as a result. Businesses may want to buy their office spaces before rental and prices shoot up. The mortgage consultants at PropertyBuyer are here to help you select the best property loan for your business at ZERO fee.

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