Rate hike not always bad for office capital values

Singapore

WITH the impending interest rate hike later this year, there has been much concern over the adverse impact on office capital values.

Since the start of the Quantitative Easing (QE) by the US Federal Reserve in December 2008, the Urban Redevelopment Authority (URA) office property price index (PPI) has been up 43 per cent, thanks to the strong capital flows into Asia and the ultra-low interest rate environment which makes borrowing much cheaper.