Gross rents dipped by 3.8%.
According to Jones Lang LaSalle's Asia Pacific Property Digest, rents in the prime market weakened with the luxury segment suffering the brunt of the rental declines.
Gross rents in the Luxury Prime market fell 3.8% q-o-q to reach SGD 4.59 per sq ft per month while the Typical Prime market saw a smaller decline of 1.2% q-o-q to SGD 3.99 per sq ft per month. Amid weaker sentiment and companies keeping expatriate packages slim, budget cuts had been more pronounced in the quarter for both the mid and senior management levels.
As a result, larger units faced greater downward pressure, especially Luxury Prime units. In terms of rental volumes, weaker sentiment has led to a slower market with a total of 2,121 non-landed rental contracts signed in the months of October and November 2013 within Prime Districts 9, 10 and 11 – 26.6% lower compared to the 2,888 contracts inked in the first two months of 3Q13.
Looking past the seasonal slowdown during year-end, the quarter’s dip has proven to be more severe compared to the 20% contraction recorded in the same period last year.
Apart from rental values softening, capital values continue to weaken in a lacklustre sales market. Luxury Prime prices decreased 1.1% q-o-q to further deepen the five quarters of decline. Capital values in the Typical Prime market similarly fell in the quarter by 0.4% q-o-q to continue last quarter’s decline of 0.3% q-o-q.