Fresh signs of recovery in Singapore’s office property: DBS

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DBS pointed to fresh signs of recovery in Singapore’s office market, with the Paya Lebar Quarter development nearly 80 percent committed.

“We believe the high pre-commitment level at PLQ bodes well for the Singapore office market, given earlier concerns that PLQ would affect demand for office buildings in the CBD and act as an overhang over the market,” DBS said in a note on Tuesday.

The yet-to-be-completed Paya Lebar Quarter development is mixed-use, with more than 800,000 square feet of Grade-A office net lettable area, with 340,000 square feet of retail space and 429 residential units named Park Place Residences, it noted. The signing office rents at PLQ were reported at S$7-S$8 per square foot per month, it said.

DBS noted that pre-leasing at Frasers Tower, which is set to be completed later this year, was also over 70 percent.

“We remain confident that the Singapore office market remains on a multi-year upturn given modest new supply over the next three to four years,” DBS said.

It reiterated its Overweight stance on the office REITs, with its top picks CapitaLand Commercial Trust and Suntec REIT.