Office spaces outside CBD 'need to work harder'

Singapore

THE rental gap between Grade A central business district (CBD) office space and those outside the district is the smallest that it has been in a decade. With CBD rentals having plummeted more than 20 per cent since the start of 2015 according to CBRE's index, city-fringe and suburban offices are finding themselves having to differentiate on building design and amenities to attract tenants.

CBRE data shows that the rental gap between the two regions has gradually narrowed from 64 per cent in Q1 2015 to 54 per cent in Q2 2017. CBD Grade A office rents averaged about S$8.95 per square foot (psf) in the second quarter.

Historically, the largest rental gap, at 114 per cent, occurred in Q3 2008 amid the brewing global financial crisis - a…