Maybank Kim Eng said it expects office rents in Singapore to slide by 10 percent in 2013, after falling 12-15 percent over the past four quarters, as demand in the near term is set to remain weak.
Marina One and DUO, two mixed use developments that will come onstream five years down the road, are seen adding nearly 2.5 million square feet of prime Grade A office space, Maybank said.
“However, office players are in for a tough time as they face stiff competition from other Grade A developments completing from now till 2017, which may exert more downward pressure on rents in the near term,” Maybank said.
The broker added that the Singapore economy experienced a contraction in the third quarter from the previous quarter, and the government is guiding for subdued growth of 1-3 percent next year.
Maybank maintained its ‘hold’ rating on Keppel REIT and Singapore Land Ltd. It has a ‘sell’ call on CapitaCommercial Trust.