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Skinny yields on prime office buildings may not be sustainable

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Leslie Yee

Leslie Yee

Published Mon, Feb 27, 2023 · 04:10 PM
    • While premier Singapore office buildings are still relevant, yields on such buildings may need to expand to reflect higher interest rates.
    • While premier Singapore office buildings are still relevant, yields on such buildings may need to expand to reflect higher interest rates. PHOTO: BT FILE

    SINGAPORE’S office property market enjoyed a strong run in 2022. But capital values of office buildings here could come under pressure because of high interest rates.

    The Urban Redevelopment Authority’s central region office rental index rose 11.7 per cent in 2022, after rising 1.9 per cent in 2021.

    The valuation of the Singapore office assets of leading office landlord Keppel Real Estate Investment Trust (Keppel Reit) rose 2.3 per cent between end-June 2022 and end-December 2022 to S$7.2 billion.

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    Commercial propertySingapore commercial propertySingapore propertyKeppel ReitSuntec ReitCapitaLand Integrated Commercial TrustThe Level GroundSpotlight

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