Wednesday, February 22, 2012

Rental gap narrowed to record low in 2011

Straits Times: Wed, Feb 22
THE rental gap between prime Orchard Road retail space and top suburban locations narrowed to its lowest level on record last year.

The gap - it was just 97 cents per sq ft (psf) in the first quarter of last year - has tightened in recent years through a combination of rents rising in suburban areas and falling in Orchard Road.

There has been something of a turnaround since then with the difference widening to $1.85 psf in the three months to Dec 31, according to property consultancy CBRE.

The widest gap in the past few years was recorded in the fourth quarter of 2007 when prime Orchard Road space was going for $7.65 psf more than its suburban equivalent.

The CBRE data showed that while prime suburban rents were at an all-time high of $29.75 psf in the fourth quarter of last year, prime Orchard Road rents have fallen considerably since their peak of $36.76 psf in the third quarter of 2008.

By the fourth quarter last year, they were $31.60 psf.

Prime rents refer to those levied on shops on levels with the heaviest human traffic. This could mean street-level units or basement shops that are on the same floor as an MRT exit...

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